Report: Apple boosts efforts to get into payments market

Apple (NASDAQ: AAPL) is stepping up its recruitment of payment executives to gain a stronger foothold in the mobile and electronic payments market, according to a Re/code report.

According to the report, which cited unnamed sources, Apple has been meeting with potential applicants for two new positions. The report said that Apple wants to have a head of product and head of business development for the new unit.

Jennifer Bailey, Apple's e-commerce chief, has met with candidates and is currently leading the initiative, according to the report. Re/code also said that PayPal and Apple have been in talks about a potential partnership. Apple and PayPal declined to comment, the report said.

This is not the first time Apple has been reportedly expanding its mobile payment efforts. In January, both the Wall Street Journal and Bloomberg, which cited unnamed sources, reported Apple was laying the groundwork for a system in which an iPhone could potentially be used as a new digital credit card. The reports said the initiative was being led by Eddy Cue, chief of the iTunes and App Store and head of Apple's online services, and that  he was looking for help from Bailey, a longtime executive who was formerly running Apple's online stores.

Apple has said that its customers have set up nearly 600 million iTunes accounts, the majority of which are tied to a credit card. Bloomberg reported in January that Apple had 400 million credit cards on file.

The Re/code report said Apple is looking at ways to make it easier for shoppers to buy physical products in apps and online using their iPhones. Apple is also looking at ways to make it easier for iPhone users to buy goods in physical retail stores using only their phones and payment information stored in their iTunes accounts. Analysts have said that the Touch ID fingerprint scanner Apple introduced in the iPhone 5S last year could be one mechanism for initiating a mobile payment.

Indeed, Apple seems open to the idea, though it has not committed to anything. "We're seeing that people love being able to buy content, whether it's music or movies or books, from their iPhone, using Touch ID," Apple CEO Tim Cook said on the company's last earnings conference call. "It's incredibly simple and easy and elegant. And it's clear that there's a lot of opportunity there."

Cook added: "The mobile payments area in general is one that we've been intrigued with, and that was one of the thoughts behind the Touch ID. But we're not limiting ourselves just to that."

Apple's rivals are finding mobile payments to be an area full of rough sledding. For example, during a recent presentation at the Electronic Transaction Association's tradeshow in Las Vegas, Google Wallet chief Ariel Bardin said that customers have been slow to embrace the company's mobile payments service. However, he said that Google (NASDAQ: GOOG) plans to remain in the mobile payment market for the long haul, and will continue to tweak the technology in hopes it will take off.

"We have been doing this for a while," Bardin said, according to a report on his presentation from CNET. "And we'll continue to keep doing this for a long while."

Additionally, the mobile payment market continues to evolve, and MasterCard and Visa recently endorsed a new mobile payments technology that could enable them to bypass Isis and other hardware-based mobile payments systems. The action could also boost NFC technology for mobile payments.

The credit card giants both voiced support for what is called Host-Card Emulation, or HCE, something that is supported in Google's version of Android, 4.4 or KitKat. HCE basically stores and transmits payment card information, such as the cardholder's name and the card number, via the cloud. That way, the information can be accessed and transferred securely by merchants and mobile apps that access the cloud. That could lead to systems that can support a wide range of banks, cards and other vendors, by passing the control of carriers. Even Isis, the hardware-based mobile payments joint venture from AT&T Mobility (NYSE:T), Verizon Wireless (NYSE:VZ) and T-Mobile US (NYSE:TMUS), has indicated it could be open to using HCE technology with NFC.

For more:
- see this Re/code article

Related Articles:
Google acknowledges slow Wallet adoption, but promises to stick with it
Isis progress: 2/3 of users have inputted card info, make 6-7 transactions per month
MasterCard, Visa sidestep Isis and wireless carriers with HCE support for mobile payments and NFC
Apple reportedly looking to expand mobile payments capabilities
iPhone 5S Touch ID fingerprint sensor points to Apple's mobile payments future

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