Shoppers could soon be able to pay via a proprietary payment system on Apple (NASDAQ: AAPL) devices as the company builds an internal team to address payments.
Eddy Cue, Apple's iTunes and app store chief, has reportedly held meetings to discuss Apple's interest in handling payments for physical goods and services on its devices, according to The Wall Street Journal, citing "people familiar with the situation." According to these sources, Apple recently tasked Jennifer Bailey with building a payment business within the company. Bailey had been running Apple's online stores.
Apple already handles payments made through its iTunes stores but this new interest would go beyond that to physical goods and services bought from other retailers via Apple devices. Consumers could conceivably order goods from mobile apps, book hotel rooms or order a taxi via car sharing service Uber, and pay with their iTunes account.
"Apple is absolutely the sleeping giant in the payments world," Denee Carrington, analyst at Forrester Research, told the Journal. "They have the capability; they just haven't tied it all together."
The Journal reported in 2012 that Apple had studied ways to break into payments, but scaled back efforts. In April 2013, CEO Tim Cook told investors on a conference call that mobile-payment technology was "in its infancy." Apple's Passbook allows shoppers to corral loyalty cards such as Starbucks (NASDAQ: SBUX) into a central location. And while users of Starbucks' mobile app can pay directly from their mobile device, money must be loaded onto the card from another credit card number on file.
Apple's new payment program could eliminate that need, using iTunes as a central payment processing center. The installed base of iPhone and iPad owners paired with registered iTune account holders — now at 575 million — makes Apple a formidable player in payments.
-see this Wall Street Journal story
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