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Will Apple’s commerce push include broader mPOS play?

Apple is reportedly introducing a new mPOS system in its own retail stores, possibly signaling its intention to introduce a solution more broadly in the market.

The new mPOS reportedly uses the iPhone 5s, Verifone payment technology and its EasyPay system to allow employees to receive phone messages, enhance interactions with mobile and encourage mobile payments. While Apple continues to dance around mobile commerce – the company has also reportedly signed an agreement in China for Passbook payments – a broader, more disruptive strategy could become evident later this year with the expected release of the iPhone 6.

“We are starting to see some trail activity in their own spaces, such as the Apple Store, which we have kind of already seen for a couple of years but the implications for that could be pretty transformative for how they might start licensing that technology to other developers or how that might be built into the rest of the retail universe,” said Tim Dunn, director of mobile and strategy at Isobar, New York.

“They have really kind of kept this stuff in their own stores up to now,” he said. “What will be really interesting is if we start to see this stuff move beyond there into a product which they could then sell, license or embed within iOS to make it more interesting for other retailers.”

Seamless experiences
The mobile POS space has gotten increasingly competitive over the past couple of years with entries from Square, PayPal and numerous other players.

What Apple could potentially bring to the table is its expertise in designing seamless consumer experiences.

However, it is not clear how an Apple solution would account for the 50 to 60 percent of shoppers who are likely to have an Android device.

“The challenge that they have is to figure out how they can really impact the mobile POS space in a way that actually makes revenue for Apple without simply being part of an ecosystem that is essentially still controlled by the big payment providers,” Mr. Dunn said.

“While it is very well improving experiences in your own stores, in a place where you don’t have control and you are in competition with other payment providers, how can Apple – who controls the minority of user experiences on the devices that come through the door – how can they actually have significant impact across all of those consumers,” he said.

“Doing something for other retailers requires a more radical solution than what they are doing right now.”

Passbook payments
Apple has also signed a deal with China’s UnionPay to integrate UnionPay’s payment services into the Passbook app, enabling users to make mobile payments at more than three million UnionPay QuickPass POS machines in China.

The deal with UnionPay in China makes sense for Passbook, as its use has been limited by the fact that it relies on the scanning of codes to facilitate the use of passes.

However, such an arrangement is not likely to open up revenue opportunities for Apple because UnionPay will be processing the transactions.

“That seems to a common sense thing,”  Mr. Dunn said. “Passbook has really always been half a solution and has relied on scanning of codes to facilitate with that, which in the majority of POS installations isn’t really a solution and isn’t a universal or scalable one if you want to be enabling payments everywhere.

Rumors of a possible NFC play from Apple, while around for several years, continue to persist, with the latest round insisting it will happen with the expected introduction of the iPhone 6 later this year.

However, Apple may in fact have a bigger strategy in mind than simply NFC.

“Apple has deliberately stayed out of NFC in the interest of owning a much broader swath of  mobile payments than just facilitating payments on behalf of MasterCard or Visa,” Mr. Dunn said.

“The fact that they are doing something in China but not in the U.S. shows they are still trying to keep their cards behind their back and that they are hopefully going to have a more radical and exciting play for us,” he said.

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York