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Apple CEO sees Touch ID as the mobile payment option of the future

News by Andrew Kameka on Tuesday January 28, 2014.

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Apple has sat out the mobile payments race while several companies have fought to wrestle control over what is expected to soon be a multibillion-dollar industry. However, based on recent reports from the Wall Street Journal and comments from Apple CEO Tim Cook, mobile payments won't exclude the iPhone for much longer.

Last week, the Wall Street Journal reported that multiple sources had informed the outlet that Apple is reshuffling executives to build a mobile payment venture. The company had originally spoke to five "well-known executives" in the payment industry but ultimately settled on moving online retail executive Jennifer Bailey into the lead position. Bailey will reportedly take charge of devising a system that turns the iPhone into a payment option.

When asked about the report by investors during Apple's earning call, CEO Tim Cook declined to comment on any specifics and gave his usual spiel about mobile payments being an "intriguing" area for Apple to explore entering. Cook went on to say:

"We're seeing that people love being able to buy content, whether it's music or movies or books, from their iPhone, using Touch ID. It's incredibly simple and easy and elegant. And it's clear that there's a lot of opportunity there. The mobile payments area in general is one that we've been intrigued with and that was one of the thoughts behind the Touch ID. But we're not limiting ourselves just to that.

"So I don't have anything specific to announce today, but you can tell by looking at the demographics of our customers, and the amount of commerce that goes through iOS devices versus the competition, that it's a big opportunity on the platform."

Cook is echoing many of the points found in the Wall Street Journal article. He's saying that Apple already has the payment information of millions of people and has been entrusted with that data. The company also has proven to have the trust of a large built-in audience with money to spend through Apple products, services, and accessories. Why not make use of that trust and launch a system that would allow Apple to earn more money through regular transactions like buying lunch or clothing?

Mobile payment solutions at the moment rely on some combination of near-field communication (NFC), linking a credit or debit card, and installing a specialty SIM or case to bring compatibility to sales terminals. Millions of dollars have been invested into the competing payment solutions in the market, but Apple could potentially devise a way to tap into the industry using its established reach with customers. There will be significant challenges, but Tim Cook's comments suggest that Apple is working on overcoming them. Touch ID, which will simplify the authentication process, may play a role in the payment solution. How exactly Apple will get its foot in the door remains to be seen.

via: Recode

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Andrew Kameka
Andrew is based in Miami, Florida.

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