After Apple dominated our front pockets (or wherever you put your iPhone/iPod), it looks like the company could dominate our back pocket soon.
That’s because with the upcoming release of iOS6, Apple has subtly threw its hat into the crowding arena of mobile payment. The initial release of Passbook will allow passes, tickets, loyalty cards, and electronic gift (egift) cards to be stored and used when needed.
There’s also the added touch of geolocation capability. That old gift cards from some speciality retailer you probably forgotten will appear when your iPhone recognizes that you are in the store. Or if you go to a movie, your prepurchased movie ticket will automatically pop up.
Apple entering mobile payment makes sense. The company has access to 400 million credit card info thanks to iTunes, and start-up mobile payment companies such as Square are popping up to take advantage of smartphone’s increasing ubiquity. Apple launching with Starbucks is a smart decision. Starbucks is one of the few companies that sells electronic gift cards in US and Canada, and has a history of allowing people to redeem the egift cards in the shop via the Starbucks app. Starbucks already had all the background stuff figured out before Apple, and now will ride on the coattail of Passbook to take advantage of a wider acceptance of egift cards.
I personally think Passbook is very exciting for two reasons:
1. Passbook will accelerate the adoption of egift cards amongst the consumers and retailers. As more gift cards become available digitally on Passbook or otherwise, consumers will be increasingly more comfortable and used to purchase and redeem egift cards. Retailers will be more inclined to offer them.
2. I really can’t see a reason in the next 5 to 10 years why anyone would to buy or sell physical gift cards. The convenience, lower cost, instantaneousness, and personalization traits of egift cards are overwhelmingly clear. It’s only a matter of time before retailers and consumers only offer and use egift cards.
The upcoming release of iOS6 confirms that Virtual Next is on the right path towards the digitization of gift cards to bring more convenience for the retailers and consumers. I intend to watch this development very closely so Virtual Next will always offer the latest digital gift card solution.