What's Apple Up To In Payments?

By Kevin Kogler, President of MicroBiz

The POS (point of sale) and payments communities were hoping that Apple would provide some visibility into its strategy for mobile payments at its annual Worldwide Developers Conference (WWDC) held in early June in San Francisco.  However, Tim Cook’s and Craig Federighi’s keynotes made no direct mention to how Apple would pursue “payments” —  not even a reference to NFC technology.

Although Apple is notorious for maintaining secrecy around strategy, if you take a look at how Apple is attacking a couple other key markets (music via iTunes) — one can start to see the groundwork Apple is laying to disrupt the payments/POS market.

First let’s recognize what is going on in the traditional credit card business. Retailers now realize that the ability to accept credit cards is a commodity. Rather than continuing to compete on price, traditional acquirers/processors are trying to transform themselves into “solutions providers” with value-added apps that can be sold to merchants to generate more revenue and reduce churn. These value added payment apps include tablet POS software that replace cash registers, stored value gift cards and card-based loyalty programs.

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