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VIRTUALISATION Apple to take on PayPal?
VIRTUALISATION Apple to take on PayPal? | Apple to take on PayPal? |
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| by Stephen Withers | |
| Wednesday, 05 August 2009 | |
  
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As reported by Nicholas Carlson for The Business Insider, the idea is that this would allow accounts could be used to pay for goods and services on other web sites. At present, an iTunes Store account can be used to purchase content and applications from the Store, and to make in-application purchases for certain apps written for iPhone OS 3.x. We agree with Carlson's observation that the 30 percent fee charged by Apple for App Store transactions would be far too high for a generalised payment facility. PayPal currently charges up to 2.4 percent commission, plus a flat $A0.30 per transaction. Additional charges are involved for cross-border transfers and currency conversions. One practice that would likely be brought to an end by such a development is the sale of discounted iTunes gift cards. From time to time, supermarkets and other big retailers offer (eg) $A50 cards for $A40. Unless the transaction fee was more than 20 percent (which would likely be unacceptable), someone could buy a discounted card and use it to pay a related party, showing an immediate profit. The real question is why Apple might get into this market. Carlson speculates that it could be a precursor to processing real-world payments (buy a beer with your iPhone?) or perhaps just an easy diversification. Scale is important when it comes to online services, especially when network effects are involved. A payment system gets more useful as the number of users increases. A lot of young people have iTunes accounts but no credit or debit cards, so being able to pay for other items online (eg, software licences, voluntary contributions to podcasters) could be a plus. Apple's already got much of the necessary infrastructure already in place to deal with the iTunes and App Stores. But would dealing with the regulatory issues be too much trouble? |
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