Apple vs. Amazon: How Will Consumer Electronics Impact Mobile E-Wallets?

Posted Friday, September 14, 2012 in Online, Mobile & IT by Patricia Seybold

Now that both Amazon and Apple have announced their major new consumer electronics products for the 2012 holiday season, the predictable techno-weany comparisons will dominate the hype. Everyone loves new gadgets! Especially those with high-resolution screens and screamingly fast access to rich media.

But I've been thinking about a different topic lately, and its one that's tangentially related to Apple and Amazon's most recent moves: Mobile E-Wallets.

Mobile E-Wallets?

How soon, I ask myself, will it be before we all carry around all of our credit and debit cards and loyalty cards as e-tokens on our mobile phones? How long will it be before we use our phones to pay each other and to pay for things at the store?

Apple Is Laying the Groundwork

I was hoping that Apple would announce an e-wallet (i-wallet?) capability on the new iPhone 5, but that didn't happen yesterday. And, when you look at the announcements that Apple did make, you can see why. It's just too early for Apple's infrastructure. They're not ready. What Apple did announce is an entire revamp of iTunes—the media delivery and payment infrastructure Apple currently uses. (This is long overdue in my opinion—iTunes can be extremely confusing and customer unfriendly!) Apple also promoted Apple Passport—which is part of its eventual mobile e-wallet offering and is included in IOS 6. Apple Passport lets consumers (and app developers) create, store, and use loyalty cards, membership cards, credit card account numbers, tickets, boarding passes, and so on. What’s missing to make Apple Passport a true mobile e-wallet is the ability to connect it to the iTunes payment infrastructure. But stay tuned!

Amazon's new Kindle Fire is a virtuoso tablet that will clearly compete well against the Apple iPad, making it seductive and easy for us to download, pay for, consume, and share apps, music, books, games, and movies. Amazon's 1-Click payment mechanism is deeply embedded in the Kindle app on the Kindle Fire. Its also easy for developers to leverage as they launch any in app purchasing behavior for other Android platforms. Amazon's genius is that they aren't focused on making money by selling devices, but Amazon makes money when anyone buys and consumes media on the Kindle app on ANY device. So, if I have an iPad, but I buy and consume Kindle/Amazon Prime content on it, Amazon wins.

Microsoft May Introduce Mobile E-Wallets Before Apple

It occurred to me that Microsoft may be closer to launching mobile e-wallets on Windows 8 phones than either Apple or Amazon-1-Click enabled Android phones. Of course, Google Wallet is already out in the market on a handful of Android phones, but without a lot of traction yet.

U.S. Consumers Will Migrate from Purchasing Media on Their Mobile Devices to Paying for Other Things

That's when it dawned on me that the likely evolution of mobile e-wallet technology in the U.S. market will take place differently than it is rolling out in Asia (where you can already pay for things using your mobile phone), and in Africa (where you can pay other people really easily by mobile phone), and Europe (where you can pay for certain things using your mobile phone). I believe that U.S. consumers will get truly addicted to being able to purchase apps, music, books, games, and videos with a single click from our mobile devices. We won't worry about security. We won't worry about identity theft. We'll just do it. Because it's really easy to do, and we gain the benefits of immediate gratification.

Then, after we've already learned how easy it is to spend hundreds of dollars per month on digital media from our phones, it will be a relatively easy transition to buy our computers and our groceries the same way.



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