The iPhone 5s, with Touch ID. Source: Apple.
As 2014 pushes on, more rumblings of an Apple (AAPL 0.33%) mobile payment system are starting to surface. The latest rumors focus on the company hiring new people to run a mobile payments team.
What's Apple doing?
Re/code just reported this week that Apple is interviewing senior executives in the payment industry for two new mobile payment positions. The article mentioned that Jennifer Bailey, who's been in charge of Apple's online stores, is overseeing the process.
This comes just months after The Wall Street Journal reported that Apple had moved Bailey away from running the company's online stores and into a mobile payments role.
Apple has long been rumored to launch its own mobile payments system, with reports surfacing back to 2010. But the latest news, paired with Apple's own admissions, makes an Apple mobile payments system all the more real.
Apple's Touch ID sensor could be at the core of a mobile payment system. Source: Apple.
More than just speculation
Apple typically has a lot of rumors surrounding it, but the company recently showed its hand a bit when it comes to mobile payments.
On an earnings call in January, Apple CEO Tim Cook said,
"The mobile payment area in general is one that we've been intrigued with. That was one of the thoughts behind Touch ID. ... 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."
That statement came just before reports came out that PayPal wanted to talk with Apple about a mobile payments system. Nothing has been confirmed the two are working together yet, though.
In a less direct but also telling move, Apple has been removing Bitcoin apps from its App Store. The removal shows that Apple isn't keen on having a way for its users to buy goods and services with a virtual currency.
So what does this all mean? Plenty.
Why this matters
Apple has more than 575 million iTunes account linked with credit cards. If the company worked with merchants to use those accounts to pay for physical goods and services, it could be a massive opportunity for Apple and its iPhone users. Forrester Research estimates that U.S. consumers will spend $90 billion in mobile payments by 2017.
While all the technology for a large mobile payment system exists, many current systems have been hindered by a lack of security and cohesiveness among merchants, banks, and tech companies. Apple already has the security and a massive amount of users who are already used to buying apps with their iTunes accounts. Turning those iTunes users into mobile payments users would be pretty easy.
While some companies may be skeptical to partner with Apple's system, it could be hard for them to turn it down considering Apple's ubiquitous operating system and mobile devices, particularly in the U.S. Add to that Apple continuing to put its Touch ID sensor in future versions of the iPhone and iPad, and users may soon be demanding mobile payments more than ever.
At this point, it seems more like a "when" than "if" question for Apple. Aside from generating revenue by taking a percentage of each transaction -- or something similar -- a new mobile payment system would help keep Apple users tightly entwined to the company's devices and ecosystem. It could also give Apple a new, long-term mobile strategy that other tech companies have failed to successfully implement.
