Ever since we first sampled the Starbucks app in September 2009, we could not help but wax eloquently how your iPhone will become your wallet. A deluge of ideas Apple has patented with NFC over time, and some interesting hirings, hint that the company is heavy into NFC. Then, in January, 9to5Mac heard from a developer at Macworld that iPhone 5 would have NFC and that MasterCard/Paypass would launch partners for an Apple-branded payment service that would span both iOS devices and Macs.
Fast forward to today, as the United States Trademark & Patent Office awards the company a major patent grant that covers the intricacies of the iWallet. According to PatentlyApple, this invention is supported by as much as 23 patent claims and dates back to the first quarter of 2009—indicating just how important it must have been to Apple.
The document outlines “techniques for implementing and defining financial transaction rules for controlling a subsidiary financial account,” allowing parents to control spending of their children, for example. Financial transaction rules are also detailed that would allow for spending limits based upon different criteria, such as a particular time period or geographic region.
The really interesting part about this are the drawings included with the patent application depicting a future iPhone with Near Field Communications (see the above illustration). The drawings indicate the use of iTunes billing system for credit card statements and records. The iWallet app could also tie nicely with a number of other utilities Apple’s been researching, such as this iPhone app for buying movie tickets.
But what’s in all this for you and me?
Unlike the App Store that does not really compete with mobile bazaars on other platforms, because it only serves iOS apps, the iWallet puts Apple on a collision course with the likes of PayPal, Google Wallet, and many other payment gateways and e-money providers. Now, tech titans Apple, Google, Microsoft, and Amazon have long been rumored to be working on solutions for contactless payment based on NFC technology. So far, only Google has marketed a commercial solution of its own. The search company’s efforts with Google Wallet, though ambitious pioneering, have faced roadblocks.
The problem is carriers too want a piece of the action and have teamed up to make sure they —not the handset makers or software platform providers— handle financial transactions on the go. Enter Apple, the only company that can bend the Soviet Ministries of the wireless market to its will. With more than 315 million iPhone, iPad and iPod touch devices worldwide, and more than 200 million credit cards on file on the iTunes Store, Apple indeed has become the biggest credit card hub on the web.
Combine all this with Apple’s market and brand power, its penchant for making cumbersome stuff easy to use, the size and reach of its iTunes ecosystem and —most importantly— the willingness of its users to spend and shop, and you have a potentially killer service all incumbents should worry about. True, the iWallet may not become the leading mobile payment provider (though the sheer size of the iTunes Store customer base could take it there), but Apple is certainly well-poised to mainstream on-the-go contactless payments.
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