BrainTrust Query: Apple Passport a Potential Game Changer

Discussion
Jun 22, 2012

Through a special arrangement, presented here for discussion is a summary of a current article from the Hanifin Loyalty blog.

Amid all the hoopla over Apple’s recent Worldwide Developer’s Conference, the biggest news for those following the loyalty and payments industries had to be Apple Passport, one of the shiniest features of iOS6. 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 exact 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.

Passport won’t exactly cut out the middleman but it 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. However, in the act of extracting value from a loyalty program, a subtle shift in brand focus takes place. While users turn to Passport for offers available based on their location, they could mentally relegate the brand’s mobile app as just the "utility" behind the scenes.

I’m 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. In that case, mobile application developers would shift focus from building standalone mobile apps to creating ones that live and breath within Passport.

If these scenarios come to pass, the consumer will come out the winner and, after all, we are all working to please the consumer. At the same time, 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.

Discussion Questions: What do you think of Apple Passport? Is it a potential game changer for mobile wallets? How should retailers respond?

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15 Comments on "BrainTrust Query: Apple Passport a Potential Game Changer"

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Ken Lonyai
Guest
5 years 5 months ago
With anything related to Apple’s developer program, the devil is in the details. If it does indeed roll out as described and continues to operate with the same rule set over time (unlikely), then yes, an epic battle will evolve as Apple, in effect, moves itself into every app possible. It just may make Apple seem like the trusted partner of every brand using Passport, which cumulatively sends a powerful Apple message to consumers. On the other hand, there are 3 zillion digital wallet/payment/loyalty players all jockeying for position. As the weak ones fade away and mergers and acquisitions play out, who knows where Passport will stand? Although it seems (by their own PR) that everything Apple conceives is golden, that’s not always so. Ultimately for brands and retailers, they have to take ownership and maintain relationships with their customers and give and take with the technologies that come and go. No one will use Passport to buy a latte if they don’t like the product or brand, no matter how convenient/cool Passport (or a… Read more »
Max Goldberg
Guest
5 years 5 months ago

I like any e-wallet that makes transactions easier and has proper security to help prevent unauthorized use. By consolidating numerous loyalty programs, retail coupons and proof of purchase systems in one e-wallet, the consumer wins. Brands that participate can gain stature in the eyes of consumers. Retailers can build loyalty through ease of use.

Retailers can take advantage of Apple Passport by targeting offers to individual consumers and rewarding them for making desired purchases. Rather than being a hindrance to building retail loyalty, Passport could finally cause retailers to unlock and use their huge troves of consumer data.

Liz Crawford
Guest
5 years 5 months ago

It’s a game changer alright. Consumers and shoppers have been waiting for this…for a while. There is a ready-market, as we have seen from the use of mobile-enabled boarding passes at airports (which I don’t think work very well yet).

Since the demand is in place, Apple Passport may be the answer. Or — it could be another app or program that comes later. The point is, the mobile device is our new wallet and we’ll see an optimization of this functionality over the next few years.

Mark Heckman
Guest
5 years 5 months ago
Certainly one of the largest barriers for loyalty programs lies in the mere number of programs, retailers, and sites that consumers now use, not to mention the resulting complexity all of these programs bring to the shoppers, who must engage each one separately to derive the benefits. Loyalty aggregation is almost inevitable. Whether it be Apple, Google, or other, somebody needs to “herd the cats” and provide a concise resource for the myriad of programs a savvy consumer uses as they shop. But there are barriers in place to prevent aggregation, namely a cogent business model that allows for individual, proprietary programs to join a consortium and still have be able to keep their identity and revenue streams in place. Accordingly, the “aggregation model” is already struggling out of the gate with regards to digital content. Too many companies want to be king, and are purposely thwarting the eventual consolidation of content in order to be the “last man standing.” I suspect we will see the same type of gamesmanship before a Passport or a… Read more »
John Boccuzzi, Jr.
Guest
John Boccuzzi, Jr.
5 years 5 months ago

Mobile wallet and NFC (Near Field Communication) have been slow to gain consumer and industry acceptance. During the last Mobile conference I attended this past spring, there were no less than 20 vendors sharing their vision for mobile wallet and NFC. Needless to say, not all (if any) will be at next years event. If anyone has a shot at creating a mobile wallet that was embraced by consumers, it will be Apple.

Why Apple? Because the late Steve Jobs was always driven by consumer experience and design while most other vendors are focused on the revenue stream first and consumer experience 2nd. Even without Jobs at the helm, Apple keeps this principle front and center.

Tom Haley
Guest
Tom Haley
5 years 5 months ago

With a few notable exceptions (Ping music sharing), when Apple throws it’s considerable influence at something, it’s sure to gain consumer attention.

Passport will accelerate a trend among consumers away from paper coupons and towards digital coupons. QR codes are not the answer for in-store coupon redemption — link to credit or debit card is. Linkable Networks offers CPGs the ability to link SKU-level coupons directly to payment cards for redemption.

Carlos Arambula
Guest
5 years 5 months ago

It’s a very attractive feature. Apple brand loyalists lean heavily towards early adopters, so on that alone I would imagine Apple Passport will be a game changer.

For retailers, I have to agree with Mr. Hanifin’s statement: “My suggestion is to start planning for this new scenario now.”

Yvette London
Guest
Yvette London
5 years 5 months ago

If it works as described, yes a game changer and retailers should jump on board with enthusiasm. Passport is not so much taking over consumer loyalty (which of course Apple already has a great deal of) as making it easier for consumers to use loyalty programs presented by others. I’m happy to sign up and take advantage of even more loyalty programs if they become even easier to access (I love Key Ring but would love even more to eliminate having to scroll through it at the register to get to the right card). There may be subtle shift in focus like with shopkick: I look to shopkick to see what deals are nearby. But I still know it’s Starbucks or Wegmans or CVS who dishing out the deals. And I’ll also know it’s Apple making it easy for me get to them.

Ed Dunn
Guest
5 years 5 months ago

Google, Microsoft, and FourSquare already offer this service so Apple will be joining a crowded field of others with this feature. This is a commodity service displaying barcodes or writing to the NFC and hardly a game-changer in my book.

With regard to retailers, it is a major benefit for the retailer mobile strategy. Retailers can now push their own coupons, QR code and loyalty offers to these wallets instead of printing and mass mailing coupons.

The new Motorola POS scanners do have support for QR codes so there should not be a major infrastructure change to support this feature.

Joe Nassour
Guest
Joe Nassour
5 years 5 months ago

Apple’s Passport concept has been tried before by Microsoft and Google. Google has the Google wallet, and Microsoft also has a passport.

It all depends on whether or not Apple makes it open and accessible — something Apple is not known for, and on consumers’ take on this feature.

Ed Dennis
Guest
Ed Dennis
5 years 5 months ago

Apple has a built-in advantage in that it has a closed system as a means of maintaining performance quality and providing security. I see security as being the key variable in this equation, as at some point in time a transaction has to occur. Linking to loyalty cards should be relatively easy, but how is the security of a stolen Passport-enabled phone to be managed. Yes there is the “log on’, but few users employ this safeguard.

Apple does have the technology edge, and I can’t imagine many retailers opting out of a relationship with Apple. Google, on the other hand, has a myriad of problems and its security doesn’t approach that of Apple, so any catch up is going to be more difficult. I think Apple may have another winner (surprise, surprise!).

Lee Kent
Guest
5 years 5 months ago

There will be blood! LOL; with the cost to enter so low, there are likely to be many players trying to reach into our mobile wallets. Apple will surely make the Mac Boyz crowd happy, but I suspect the android crowd could be influenced by someone else. I don’t see this as a game changer so much as the logical next apps to roll out.

Herb Sorensen
Guest
5 years 5 months ago
There are three components to every single sale. The first is the “meeting of the minds” which means that the shopper and retailer come to agreement on the transaction. This is the legal basis of what is happening billions of times a day in stores all over the world: the retailer entices the shopper and the shopper accepts the “offer.” The second component is the delivery of the goods/services. In self-service retail (the foundation of the past and way into the future,) the shopper simply physically takes possession, by the simple act of moving the item into their cart. (For e-commerce the first and second component are blended to involve an electronic “cart” and, typically, the retailer delivers the goods to an address the shopper designates.) The third component is the movement of the consideration for the purchase from the buyer to the seller. This component is more complex than simple payment, including such things as coupons, loyalty considerations or other things. The smartphone “wallet” IS the likely focal point of the third wave of… Read more »
Jonathan Marek
Guest
5 years 5 months ago

Yes, this does have the potential to be a breakthrough. The honest truth is that retailers cannot own this space. I have the Starbucks app, and I use it for payment today, but how many retailers have the visit frequency to make it worth my while to use the app? Not many. And I am already annoyed that I need a different app for each airline.

Apple is great at solving problems in a way that is fully integrated, and they know how to integrate into my phone better than anyone. Sounds like a huge opportunity.

Bill Hanifin
Guest
5 years 5 months ago

Apple Passport has potential in itself to bring convenience to consumers who wish to organize their loyalty program activity. On a level beyond what we noted in our post, Passport may pose a real threat first to purveyors of offline solutions to consolidate loyalty program apps like Key Ring Thing.

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