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iPhone owners wait for what's in the cards with Passbook

Caitlin McGarry | Sept. 19, 2012
Few know how exactly it will work, but iOS device owners and businesses will soon get the chance to jump on board with Passbook. The new feature debuts this week, when Apple releases its iOS 6 update on Wednesday.

There are privacy concerns to be considered with the move toward digital wallets, but Rose said if customers have opt-in privileges, the advantages could be substantial.

"If someone were to take my wallet, they [would] know an awful lot about me," Rose said. "They're going to see my insurance card, know what credit cards I have. But there's also an understanding of the customer. The travel piece that's coming first, the boarding pass, is one little piece of the puzzle."

Another piece could be near-field communication (NFC), a short-range wireless technology used for digital payments. But that's not part of Apple's plans at the moment--the newly unveiled iPhone 5 doesn't feature include any NFC technology. And Apple executives have indicated that decision reflects the demands of the market. "Passbook does the kinds of things customers need today," senior vice president of worldwide product marketing Phil Schiller told AllThingsD in the wake of last week's press event.

Rose said he was surprised the iPhone 5 didn't include NFC technology, given that Apple holds a patent for a travel-management system that incorporates NFC. Retail analyst Greg Buzek, president of retail and hospitality consulting firm IHL Group, said Passbook would be more beneficial to retailers with NFC technology, adding that Passbook runs the risk of slowing down transactions when cashiers have to scan coupon or gift card barcodes from smartphones, if the store even has the right type of scanner.

"And what happens if the cashier drops [the phone]?" Buzek says. "Whose liability is that?"

But a recent CreditDonkey.com survey indicated that 68 percent of U.S. shoppers prefer using credit and debit cards to digital wallets. Retailers are also slow to adopt NFC technology. Aite Group reports that only 2 percent of merchants worldwide have terminals that can recognize NFC chips.

Buzek said more infrastructure build-out is required on the part of both Apple and its retail partners to make Passbook a success for consumers. But if pre-release buzz is any indication, Passbook may be to wallets what the company's iTunes Store was to records and CDs.

 

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