Lost today amidst the din of new iPad reporting was an Apple patent win that could potentially have greater implications than even that magical tablet. Although iWallet rumors have been circling since as far back as 2010, a new Granted Patent for the technology actually shows the service functioning more like a centralized banking system, allowing credit card statements to be sent directly to Apple iTunes accounts, Patently Apple exclusively reports. According to the filing, Apple will allow you to keep your credit and debit cards on file with them using iWallet, pay with the swipe of a barcode or an NFC handshake, and get your bill or statement emailed directly to your iTunes account. If you think about it, Apple’s App Store is already a clearinghouse for billions of dollars in currency, and the next logical step for Cupertino would be to extend its reach from the ethereal world of apps and music to the physical one.
What is novel about Apple’s new patent, however, is its language detailing the ability to delegate and fine tune payment options and methods for individual “users.” For instance: Just as the iTunes Store allows you to set your iPhone to limit the purchase of content deemed mature, you may soon be able to set your son or daughter’s iWallet to only permit transactions for food — but not for clothes. This sort of thinking could serve as the scaffolding for an entirely new and unique financial ecosystem in which spending is analyzed minutely, and custom rules can be developed based on habits — or restrictions applied based on specific criteria. Although budgeting apps such as Pageonce ostensibly exist to meet this demand, the ability to work with financial institutions and retailers intimately, in the way Apple is surely planning, will make all the difference. Although the legalese is a bit — dense — the patent goes even further, allowing for a child, for instance, to send a request to the iWallet account holder for permission to make an exception to a preconfigured payment rule. For a birthday present, perhaps.
Apple is hardly the first tech company to try its luck at E-banking, hoping to replace cash and credit cards in favor of the ubiquitous smartphone: Google has been trying in earnest, most recently with Google Wallet, to bring the medium to the mainstream. Manifold security concerns, including two successful hacks, have kept the tech, however, from mass adoption.
Or there may be another reason: A new study by marketing research firm Harris Interactive found that most Americans don’t actually use their smartphones for the “smart” part; of the 2,056 adults surveyed in February, only 5 percent of respondents had ever scanned their phones for an admission to a movie or as an airline ticket, and even fewer used their phones to pay for items such as coffee (3 percent) — even though the iPhone has had a partnership with Starbucks for years. According to the study, a full 63 percent of American smartphone users don’t feel comfortable at all using their devices to store credit card information, a glum indicator of what Apple and Google are up against.
Although there is hope — younger respondents in the Harris study were much more comfortable on average using their smartphones for in-person commerce, and one in five users expected payment-by-smartphone to be the norm in less than five years, misgivings or not. Given Apple’s unique penchant for spinning new technology in such a compelling way that consumers are all but helpless to embrace it, iWallet could turn out to be much more than another patent for Apple’s trophy case. We’ll have to wait and see.