Apple’s Solution To Mobile Payments User Adoption

With all the hype of mobile payments being announced this Tuesday at the big Apple (NASDAQ: AAPL) event, much attention has been given to well, just about everything, except Starbucks (NASDAQ: SBUX).

I’m not big on rumor articles or speculation pieces so I’m hesitant to write this today. My premise and belief in product development has always been to develop ideas around changing social behavior.

My contention has been that a clear correlation in spotting changing social behavior should be foremost in thought. It is not the latest and greatest technology of the time that matters. It is the changing social behavior and winning user adoption that will lead the space. The product that rises to the top recognizes a changing social behavior, gets lucky enough to create one, or both, all the while fulfilling this newly created market need. Those products that can position themselves accordingly have a leading advantage; their potential user base has already adapted and accepted the learned social behavior change as their own.

As noted in my 2012 article, “Starbucks, Mobile Payments And The Oprah Effect. How Starbucks will drive changing social behavior and user adoption into 2016,” Starbucks has spearheaded a new change in social behavior with it’s creative use of the Apple app ecosystem and the iPhone hardware device by getting customers to pay for their orders with a mobile phone.

The magnitude of what Starbucks has truly accomplished here goes far beyond buying lattes one mobile payment at a time. Starbucks has in a major part lead the changed social behavior of users using the mobile phone as an multi-adaptable use device.

In July, Apple announced iTunes Pass. The following is an excerpt from my July 31 2014 article, “Apple Takes A Play Out Of Starbucks Mobile Payment Handbook With iTunes Pass.”

“Much like the Starbucks Mobile Phone App at it’s launch, Apple’s iTunes Pass will allow users to use a Passbook card to add credit to an iTunes account, initially just from an Apple Retail Store.”

From 9to5 Apple Site (Jul 16 2014):

“To take advantage of this new program, you need to use the iTunes Store app on an iOS device to obtain an iTunes Pass. You can get one of these by tapping the “Redeem” button at the bottom of the home page within the app. To use the card, you can visit an Apple Retail Store and ask a specialist to help you add credit to your account. The specialist can then scan the barcode on the Passbook card to immediately add credit to your account.”

Continuing from my July 31 2014 article:

“Starbucks has established the user adoption processing workflow very successfully from it’s initial launch in 2011. To the benefit of Apple, training the user in this very similar workflow will not be necessary.”

A New iPhone And A Watch

What will these two Apple products have in common? A hefty price tag. There is no doubt in my mind that these two new, beautifully industrial design pieces of art will carry an expensive price tag.

How will this play into the widespread adoption of an Apple mobile payments ecosystem? If the system is based purely and contingently on having these two new devices, not very well. Conversely though, looking at what user adoption in the mobile payment loyalty space has already taken place, what is established and successful, clearly the Starbucks mobile payments, loyalty program ecosystem is a front leader.

I’m a big fan of iBeacon. The creative use potential is huge. Regarding NFC, a chip by NXP Semiconductor (NASDAQ: NXPI) may very well likely make it into an Apple device this year. Touch ID will be helpful indeed. POS system updates are underway. None of these though will drive use and adoption of an Apple mobile payment system initially.

The already established changed social behavior and user adoption of the Starbucks mobile payments model, the new July 2014 iTunes Pass model, will lead users into the Apple mobile payment ecosystem, not a new $900 iPhone or $450 watch.

Time will tell though. Either way, as always, it’ll be interesting to watch.