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Apple Passport a Potential Game Changer

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Apple Passport a Potential Game Changer
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Each edition of Apple’s Worldwide Developer’s Conference is met with huge anticipation. The 2012 edition lived up to expectations, with a stream of announcements amid fanfare and theatrics. One of the best accounts of the day was reported here by a Forbes tech blogger and, as you can read, Apple stock had risen almost $3 within the first 40 minutes of the event.

While consumer attention was directed towards enhancements of the laptop and notebook product lines, Apple was advancing a corporate agenda as well. The announcement of  iOS 6, due out this fall for iPhone, iPad, or iPod touch, was packed full of features that raise the bar in the race for supremacy in portable electronic devices, and seemed to fulfill the threat by the late Steve Jobs to wage “thermonuclear war” against Google.

The biggest news for those following the loyalty and payments industries had to be Apple Passport, one of the shiniest features of iOS6. Passport is certainly not the first multi-function “wallet” brought to market. Anyone who remembers the beginnings of the smart card era in the late 90’s will know that the wallet concept was one of the most often touted features of chip cards. The failure of the wallet concept to take hold in this era was tied to lack of traction created for smart cards themselves.

Apple’s introduction of a multi-function wallet on the iPhone is another matter, representing more than another cool feature that users can enjoy with their iPhone or iPad. While consumers see the ease and utility of being able to have coupons, boarding passes, movie tickets, and digital loyalty cards at their fingertips, the brands that will have their apps folded into Passport have a lot to think about.

The details of how Passport works are not yet clear, but assume that users will be required to give permission to access the mobile apps on board the phone from airlines, movie theaters, or any retailer that has a loyalty related application. Passbook is time and location enabled, so passes and tickets will appear on the phone’s Lock screen at just the time when they can be used.

If you’re approaching security at the airport, your digital boarding pass will appear. Walking into a retailer where you have a coupon good for that day, the QR code giving access to the coupon would appear. Or, if you’ve loaded your favorite loyalty apps from Starbucks, CVS, Sovereign, or AmEx, you might be reminded that you have sufficient points to redeem for a specific offer.

Disintermediation is becoming a keyword in mobile loyalty and payments today. Webster’s defines the word as “the elimination of an intermediary in a transaction between two parties”. Wikipedia describes the word in more understandable terms “cutting out the middleman”. Passport won’t exactly cut out the middleman, but does have potential to shift consumer focus from retail brands such as Starbucks, to its own.

Consumers will still need to interact with the individual mobile apps created by Starbucks, CVS and others to load value, check their points balance, and find a store location. It is in the act of extracting actual value from a loyalty program where the focus shifts. Users will be looking at Passport for offers available based on their location and could mentally relegate the brand’s mobile app as the “utility” behind the scenes.

I’m just guessing, but access permissions are only step one in this game of mobile loyalty. Being able to develop a bespoke mobile loyalty application directly within a Passport platform can’t be far behind. And, if that is the case, the developers of mobile apps would shift focus from building standalone mobile apps to creating ones that live and breath within Passport.

The consumer comes out the winner in the process and we are all working to please the consumer above all. But creating advantage for your brand’s loyalty program via a mobile application will become more challenging. My suggestion is to start planning for this new scenario now. Google has to be considering how it will respond to Passport and you can expect the entire mobile application market to shift in the direction of working under the Apple or Google tent.

What would it be like to have a day without change? These days, we have less opportunity to find out as change becomes the norm rather than the exception. Embrace change and stay one step ahead of the those that resist.


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