Pundits (including me) have been predicting Apple’s entry into the mobile payment space — using a smartphone instead of a credit card to buy stuff in the real world — for years.
It hasn’t been a hard prediction to make. The financial rewards are enormous, and Apple has filed multiple patents around mobile payments over the years.
One of the unheralded innovations of Apple’s original iTunes store was its micropayments – you could charge only 99 cents. At the time, expenses would have eaten up that money, making it impossible to make any money.
But Apple figured out how to do exactly that in a profitable way. That gave them time to gain the trust and credit card numbers for 100s of millions.
Now they have a pone with fingerprint security and a secure hardware enclave on the chip they build themselves. No one else comes close to this level of security. It is more secure than any credit card.
They can leverage both of these by creating a more secure system, one that will sell huge numbers of iPhones, and, more importantly, open up a huge revenue stream for them. A revenue stream that few others will even be able to come close to.
I mean, is someone going to trust a Samsung phone to do the same thing. Apple has the most secure sites according to a recent study, the only one with a score of 100. The next best is at 65.
It will take a long time for anyone else to enter this space. Apple innovates again.