iOS 8 Gives Us a Glimpse Into Apple’s Real World Payments

A new, unannounced iOS 8 feature leaked after WWDC, showing Apple’s plans to place installed apps on iPhone home screens based off location. The examples included the Apple Store and Starbucks. For instance, if users are at Starbucks, the technology would place the app on their home screen so they could access it with a simple swipe.

As we all know, there are rumors that Apple is exploring the payments space, with Tim Cook expressing significant interest in what Apple can do. Apple has over 800 million iTunes accounts with credit cards attached, putting them in prime position to take the payments industry head-on. I previously wrote about how Apple might use TouchID and iTunes accounts to process e-commerce payments on iOS devices. Now, we can get a glimpse into how payments would work in the real world.

Below is a quick mockup of how the flow can work. With iBeacon, iOS devices can communicate with Bluetooth low energy (BLE) devices at specific distances. With iOS 8, you can use location services to get the right app in reach when it’s useful. Combining the two could potentially bring up an Apple Payments app when users are within 3 feet of BLE devices. If Apple doesn’t want to create and manage their own payments app, they can process payments inside existing apps (like Starbucks), or by using app extensions.

Apple Payments Flow Mock

Apple can do payments in three ways:

  1. Apple Payments App :  Apple can create its own payments app that would process payments through TouchID, allowing users to manage and view previous orders. Stores can connect to the app through a BLE device to send the order details (like a receipt), while customers pay through TouchID. The payments app can show up on the home screen when the user is within three feet of a device.

  2. TouchID Payments API : Allow apps themselves to process payments through iTunes and TouchID when the user is at a Starbucks and within 3 feet of a BLE device. The Starbucks app logo appears on the home screen, users swipe up and order details are there ready for payment via fingerprint. Personally, I think this is the most likely scenario to drive downloads of retailer’s apps, while giving them control. It would also justify why brands would let Apple charge a higher percentage than other payments solutions.

  3. App Extensions: iOS 8 enables apps to talk to each other as well as run simultaneously. I would expect Apple to create a payments app extension that apps can use to talk to stores’ BLE devices for transactions.

This all requires a system on the retail side to identify who has paid and who gets the receipt. Using names/photos like Square’s recently defunct app can achieve this. Apple seems to be continuing to build the foundation to make this a reality. The latest announcements show it.

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Reposted from @kunaalarya’s Medium page found here.

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