Apple’s Passbook isn’t the digital wallet of our times, but it’s sure trying to be

spotlight on passbook

At launch, it was clear that Passbook’s ecosystem had a long way to go before maturing, and it seems like Apple is slowly taking the right steps. But as it goes with growing any app marketplace (which, essentially, is what Passbook is), a platform’s success hinges on the number of developers it can woo. 

There’s undeniable convenience to using your phone as as a wallet. While Apple is trying to get big businesses on board and simultaneously convince users this is he future, there are still plenty of obtacles. At the moment, Passbook needs some obvious improvements, including a bit of an image overhaul (it’s been painted as something of a complication for users).

Despite the bumps it’ll have on the road to mass adoption, however, Passbook offers enough of a value proposition to early adopting businesses to want to offer it as a service to customers. So two weeks in, how is Passbook evolving? In a word: Quickly. 

Early adopters and third-party developers

Among the early adopters is American Express, which started supporting Passbook last week. AmEx’s VP of Digital Communications Strategy, Brad Minor, tells Digital Trends that the company decided to work with Passbook so it could be where the users are — smartphones. “American Express is committed to going where its card members are engaged and focused, which is increasingly on their mobile devices. At Amex we’re focused on digital innovation and are always looking for ways to reach and engage Cardmembers in new technologies as they emerge.” Its app provides users a central location to check their account activity, spending updates, account balances, and customer service information.

Target, which is also using the iOS app, explains its motivation for a Passbook app as a natural next step for its tech savvy customers. It offers customers a quick way to access their existing mobile coupons. Target declined to comment about the usage of its Passbook, but assured us that the “traffic to [Target’s] iPhone app has been very strong since Passbook launched.” The Target spokesperson added, “We absolutely think Passbook created excitement among our guests.”

The industries that have adopted Passbook range from retail, to restaurants, to attractions, and include vendors like Walgreens and Sephora. Accesso, an e-commerce and ticketing software provider, has developed Passbook apps for the Ceder Fair theme parks and the Columbus Zoo. Delta Airlines, Virgin Australia, and American Airlines have also gotten a head start. And just this week, Airbnb, Eventbrite, and McDonald’s have joined in on the digital wallet fun.

passkit examples

More importantly, third-party pass creators like PassKit, Tello, and Passdock are filling in the gaps for companies with fewer developer resources. By offering idiot-proof, template-based solutions that anyone (even those without any programming language knowledge) can use to create basic transport, coupon, store card, membership, or event ticket passes, these companies have been thriving since day one of Passbook’s announcement.

Even a Passbook competitor like Lemon, a startup that began with digitizing receipts in 2011, has also been positioned to benefit from Passbook’s debut. The company grabbed some spotlight this week when it opened up its platform for third-party developers  to create passes for its own ecosystem. We briefly spoke with Lemon CEO Wences Casares, who reasoned his product isn’t a direct competitor with Passbook.

The undeniable benefits of Passbook

Whatever a business’s Passbook strategy is, there’s a definite advantage for a company to adopt its system – the primary being unprecedented access to sending notifications to iPhones. For example if you’re walking by a Starbucks, granted that you have its app downloaded, your phone can identify that you’re near the retailer. Passbook can then push a notification to your iPhone’s screen even if it’s locked indicating that you have a Starbucks coupon. It’s almost like a gentle reminder saying, “Hey you have a redeemable coupon for a free coffee, come and visit Starbucks!”

“Not only does this provide convenience (especially when Passbook kindly reminds you that you have the pass when you walk near the merchant) and economic benefit for the consumer, there is a huge operational opportunity for the merchant; both in terms of cost saving (producing, distributing and updating digital passes) and a huge customer engagement win,” Paul Tomes, co-founder and CEO of PassKit, a third-party Passbook pass creating service, explained to Digital Trends.

Consumers, on the other hand, have the convenience of housing tickets, membership cards, coupons, and other items within a single digital wallet. For clarification purposes, there are three ways to add a pass to Passbook: You can either add passes from an iOS app that supports Passbook, click on a URL (or button) that uploads the pass to Passbook, or by clicking on an attachment sent via email.

Growing pains

Right now, Apple has a few hurdles to overcome – some of which, like some of these bugs, have been fixed already. The number of developers adopting the service is far from the critical mass necessary for users to be going all in with Passboo. Note that the list of Apps for Passbook is editorially hand selected by the Apple team; not every supported Passbook pass will show up on that catalog, so there are far more companies supporting Passbook than you see there.

Then there’s the responsibility to keep the developers happy by meeting the needs and requests of its third-party developers. Tomes has been noticing that businesses have been requesting that Apple support more types of barcodes. Right now it only supports three types: QR codes, Aztec, and PDF417, and developers want to be able to create for retailers that have point of sales terminals that read alternative formats. It’s just one example of how Apple could offer an olive branch to the developers it desperately needs right now.  

Apple also hasn’t done a terrific job educating developers and iOS 6 users about Passbook. Tomes has sent recommendations to Apple after receiving feedback from small and medium sized businesses, who weren’t sure why they were required to open an Apple developer account to acquire a Pass Certificate to create passes.

But with that said, Apple is signs of making an effort to create standards and tie up loose ends to boost its Passbook ecosystem since the success of its platform is contingent on third-party developers.

Among Apple’s latest efforts include the release of a uniform Add to Passbook button. Third-party developers can integrate this button in a purchase’s receipt or confirmation page that customers can click to quickly add their ticket or coupon to Passbook with a click of a button.

The future of Passbook

In order to make Passbook the first digital wallet that’s a market and user-facing success, Apple needs to court and bag a few big name retailers. Walmart and Costco are just a couple of companies that come to mind, but integration with many theme parks and airlines will also be critical to Passbook’s success. “If you look at how technology has evolved over the last decade, airlines have been a big driver for consumer adoption of many developing technologies. Theme parks soon followed suit with print at home ticketing and in many cases, now account for as much 40 percent of their overall ticket revenue,” Accesso CEO, Steve Brown, said to Digital Trends. “Anything that can be done to speed guests through the initial point of entry is a huge win for everyone, and Passbook’s technology significantly accelerates that process.”

It’s inevitable that Apple will leverage its mobile wallet and evolve it into a mobile payment app — that’s just a no-brainer. However it won’t come anytime soon as there are regulatory hurdles to bypass. Tomes predicts that it will “probably happen as authentication methods and payment regulations start to converge.”

The fact remains that if you’re looking to add and use your credit card on a mobile wallet, you have to turn to a solution like Lemon. With Passbook, you can connect to store-specific cards, not your own account — so no, for now, Passbook can’t replace your wallet, just your retailer accounts. With Passbook, you can’t pay for that coffee with your debit card, only your Starbucks card; it’s a way to promote store loyalty, and something Apple hopes will get companies exciting about developing for Passbook. 

Which means that Passbook’s future is in the hands of third party developers. Apple can but has chosen not to charge developers (except for the $99 fee for a developer account) for Passbook, to make the transition as painless as possible and to speed up adoption. Just like developers drove the success and adoption of the App Store, so it will go (hopefully) for Passbook.