Apple Primed to Become Mobile Wallet Leader

Apple Primed to Become Mobile Wallet Leader

April 30, 2014         Written By John H. Oldshue

Apple published its quarterly earnings last week, a few hours after we published our original story “The Mobile Wallet Battle Heats Up”. Apple CEO Tim Cook took the earnings call as an opportunity to tell everybody about his war plan to capture your wallet.

“iTunes software and services revenue continue to grow at a double-digit rate, thanks to an incredible ecosystem and our very large, loyal and engaged customer base. With its strong momentum in growing profitability, iTunes is a very important driver of our business not only here in the United States, but around the world. We now have an almost 800 million iTunes accounts, most of these with credit cards. This is a staggering number.”

When you read between the lines, Cook is saying a number of important things.

  • They have close to 800 million credit card numbers, a “staggering number.” There are only 330 million people in America. A very significant number of those do not have a credit card because they are too young or too old. So Apple probably has a great majority of the U.S. cardholders in their database, in addition to a substantial number of the cardholders in the developed world.
  • The revenue from iTunes, where the credit cards are used, continues to grow at a double digit rate. People are using Apple iTunes more and becoming very comfortable with it.
  • The word Cook used: ecosystem. Once somebody enters the Apple ecosystem, they usually don’t leave. Apple looks to enhance that ecosystem with a product like the iPhone which can become your wallet.

Apple has been slowly setting the trap to become the leader of e-commerce and mobile payments, and all the pieces are just about in place:

First, get everybody’s credit card numbers in a database via a cool product that everybody wants and uses: iTunes. Done.

Second, create a device that people carry with them at all times that will hold these credit card numbers: iPhone. Done.

Third, create a very secure system so if a thief stole an iPhone, he would not be able to use the phone or the credit card numbers in it, making it much more secure than a regular leather wallet with credit cards. Use something like fingerprints that a thief couldn’t reproduce or fake: TouchID on the iPhone 5S. Done.

Fourth, put a NFC (Near Field Communication) chip in the phone so the consumer simply verifies his ID with his fingerprint and then waves the iPhone at the register. The NFC chip then sends the encoded card number. Almost done.

Some industry analysts believe the iPhone 6 may have an NFC chip. After that, it’s simply a matter of getting merchants to install NFC-enabled registers.

When the Wall Street Journal asked about mobile payments, Cook responded:

“I think it’s a really interesting area. We have almost 800 million iTunes accounts and the majority of those have credit cards behind them. We already have people using Touch ID to buy things across our store, so it’s an area of interest to us. And it’s an area where nobody has figured it out yet. I realize that there are some companies playing in it, but you still have a wallet in your back pocket and I do too which probably means it hasn’t been figured out just yet.”

That wallet may not be in your back pocket for much longer.

The information contained within this article was accurate as of April 30, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.


About John H. Oldshue

John Oldshue is the creator of He worked for over 15 years in television and won an Emmy award for his reporting. He covers credit card rate issues for
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