Here’s How Apple Will Make the iPhone Your Wallet

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While it has been over a year since Apple’s (NASDAQ:AAPL) interest in an iPhone-based payments service was made apparent in a patent filing, the Cupertino-based company has made several other moves since then that appear to have laid a solid foundation for turning the iPhone into an e-wallet. As recently noted by Bill Hardekopf at The Christian Science Monitor, there are four key components that Apple must have in order to build a successful iPhone-based payments service.

First, Apple needs a substantial database of users’ credit cards in order to make the venture worthwhile. According to a transcript of Apple’s recent earnings call provided by Seeking Alpha, Tim Cook stated, “We now have an almost 800 million iTunes accounts, most of these with credit cards.” While not all of the iTunes accounts are linked to credit cards, even a conservative estimate would put Apple’s total number of credit card-linked accounts in the neighborhood of 400 million, which is still about twice as many active user accounts held by e-commerce giant Amazon (NASDAQ:AMZN). If Apple were to create an intuitive, secure payments app for iOS, it could easily convert its iTunes accountholders into a readymade user base for a mobile payments service.

Second, Apple needs a widely-used mobile device to function as an e-wallet. According to comScore’s latest data from its MobiLens and Mobile Metrix services, Apple’s iPhone had a 41.4 percent share of the U.S. smartphone market during the three-month period ending in March. Last quarter, Apple sold 43.7 million iPhones, a record for the March quarter. Needless to say, it appears that Apple already has the second component for an iPhone-based payments system.

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