An Apple a Day

Things are heating up, folks. When I originally posted about Apple’s move towards a unified payment system united under the iTunes umbrella, I was thinking pretty big picture, but there’s even more possibility here that I hadn’t considered. Run with me.

Recently, I was turned on to a company called Green Dot (GDOT) that has made a name for itself supplying pre-paid reloadable debit cards, mostly on the west coast. I was intrigued by the company’s quick growth during a time of economic recession, and I realized that, of course, people are moving away from credit cards and more towards debit transactions. Green Dot allows people from a myriad of income levels to have access to all the conveniences that a credit card allows in the modern marketplace with the added benefits of security and anonymity. Awesome.

So when I predicted a near-field payment system, I wasn’t considering a marriage of the two ideas, but the notion seems even more powerful now that I’ve read this piece by Tim O’Reilly and this post by Peter-Paul Koch. See what’s happening here, in my opinion, is a sea change in the way people are going to be managing their money, and it’s going to be Apple-based.

This may sound crazy, but we’re running with it, remember? Apple will introduce a mobile payment system, with the hardware to support it being present in all new models of iOS devices going forward (iPhone, iPod Touch, and iPad). As these devices proliferate (even moreso than they are now), we’re going to start seeing adoption of devices with these NFC capabilities start to rise significantly as the older models are phased out (think 2-3 generations of devices, which is 2-3 years in Apple land) and the NFC-equipped models become prevalent and cheap. As people start turning to these devices as their mobile wallets, they will also start using iTunes as their primary hub of payment, again with possible banking/credit services being offered by some new branch of Apple (not likely, but possible). As NFC becomes a de facto standard, people will start to see the iPhone as part of their lifestyle to a greater degree than they do now. At present, people still view the iPhone as a luxury item, something that is generally incompatible with their budget/spending patterns, or something that doesn’t fit their image. This will change as the iPhone begins to shift from a high-SES indicator to a mainstream societal mainstay. Apple will undoubtedly continue to produce products that will hold a significant amount of mindshare and indicate a high SES, but the fact is that the iPhone, or, more specifically, owning an NFC-equipped iPhone, will no longer be out of reach for the majority of people in just a few short years. This will bring about a massive paradigm shift in our handling of transactions across the country, and possibly the world. It will be a beautiful thing to see people of all income levels and socioeconomic strata using the same device, deriving the same enjoyment out of it. This may even signal a societal shift towards a resource-based economy, but I believe I’m being a tad optimistic there.

As Apple continues to grow, I am still amazed that their innovation does not show any signs of slowing down. Get ready, folks, this will be an interesting two years.

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