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Banks In Danger? Apple iOS 6 And Passbook Mobile Wallet Could Change Banking

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Apple placed a mobile wallet in 100 million iPhones via iOS6 according to Jim Bruene at Netbanker.  Back in June, Mr. Bruene asks if the Apple Passbook is a friend or foe to banks?

I have long been a fan of the Netbanker blog that Jim Bruene writes in addition to his in-depth reports on technology innovations in the staid banking world. His vision and insights into what is happening in the hands of millions of consumers using handheld devices is extraordinary and helpful if you’re a small business trying to compete with the big boys.

If you can store money on a digital card, do you use your bank less? Do you stop depending on your bank for daily transaction help (as in an ATM or check)? Banks earn on all those transactions, of course, and if you can store value (as you can with Apple's iTunes), then you reduce the profit your bank would normally receive. Does Passbook give merchants of all types a way to avoid those pesky credit and debit card fees charged by banks and processors?

According to the Netbanker post:

Is the POS experience dramatically better than using your Visa/MasterCard plastic? Not really during those 15 seconds of your life, but it's not worse either. Shaving 2 seconds off transaction time is not what this is about. It's the retailer value-adds that make it a huge winner.

Smart merchants will tack loyalty points/rewards/amenities (how about a free shot of vanilla in that latte?) on to Passbook-enabled purchases and you will soon be conditioned to pay with your phone. Really, just having your receipt stored safely away in the Passbook app could make the difference between using the store card vs. MC/Visa.  -- Netbanker (link below)

Plus, check out some of the recent news in my resources section below.

Despite my posts that slam Apple for what are foolish, non-consumer-oriented choices, I believe they are a brilliant company overall and provide huge opportunity for savvy small business owners who want to leverage the mobile platform. In their latest iOS 6 upgrade, they released an update for Passbook which creates, in essence, a mobile wallet. Several other bloggers have hammered Apple for this half-baked release of Passbook. I’m not concerned with that because it gives small business owners and main street retailers a bit more time to figure out how they can leverage one of the growing Passbook apps or create their own.

According to the Apple website: “Your boarding passes, movie tickets, retail coupons, loyalty cards, and more are now all in one place. With Passbook, you can scan your iPhone or iPod touch to check in for a flight, get into a movie, and redeem a coupon. You can also see when your coupons expire, where your concert seats are, and the balance left on that all-important coffee bar card. Wake your iPhone or iPod touch, and passes appear on your Lock screen at the appropriate time and place — like when you reach the airport or walk into the store to redeem your gift card or coupon. And if your gate changes after you’ve checked in for your flight, Passbook will even alert you to make sure you’re not relaxing in the wrong terminal.”

What I see as an opportunity is for, let’s say, independent bookstores to cooperate and create an app that all indies could use with their consumers. If indie bookstores are to compete with Amazon, Walmart, or name the big box of your liking, they should band together and spend $100,000 to create a competitive app (not to Apple’s Passbook) and give consumers an easy way to pay and store loyalty cards. There are plenty of opportunities for small shops to build loyalty apps on this platform and find ways to bring customers into their retail stores.

Resources:

Constant Contact, the email marketing folks, has a blog post about it that points to opportunity, too. You can read that here. Or visit this infographic they shared and I posted to Flickr on mobile loyalty. PLUS, three more great links on Page 2.

Read Netbanker’s detailed post on Apple Passbook here.

Read on how American Express is teaming up or integrating with Apple’s Passbook.

Top Retailers Going Mobile Fast from Practical Ecommerce.