Why Apple could be the one to kick-start mobile payments

The Wall Street Journal reports tonight that Apple is “laying the groundwork for an expanded mobile-payments service” that would capitalize on all those credit card accounts it accesses through iTunes and the App Store. The piece, which cites anonymous sources familiar with the effort, claims Apple’s Eddy Cue has met with unnamed “industry executives” and that Cupertino veteran Jennifer Bailey has moved from managing the company’s online stores to helping to build the new payments business.

I’m very skeptical of prospects for mobile payments in the U.S. for at least the next few years, as you know if you read this space regularly. But Apple lays claim to a few assets that enable it to light a fire under a still-tepid mobile payments market. The millions of iPhone users in the U.S. already have iTunes accounts, so establishing new accounts isn’t necessary and security concerns would be lessened. Users of iOS devices are clearly more likely to use their gadgets to make purchases than Android users, and convincing them to extend those purchases to the point of sale shouldn’t be all that difficult. Apple’s Passbook could give bring value to mobile payments for both users and merchants, providing an incentive to embrace a new system, and in iBeacons it has the underlying technology for such a system. Finally, Apple’s incredible marketing prowess could convince consumers that any new system is cool enough, simple enough and provides enough value to use instead of credit cards or cash. I can’t think of any other potential player in the market who can make those claims.