Game Changers.  Apple has a history of changing entire industries: The Mac, iPod, iTunes, iPhone, The App Store, iPad, iBooks, Apple TV, etc.  The change to these industries are digital and disruptive.  What’s next?  It needs to be something BIG, very B-I-G.  Apple’s market capitalization is approximately $500 Billion with revenues of over $100 Billion annually and growing.  Apple is currently the largest company in the world.  It needs something to be big enough to impact its bottom-line — to move the needle.  It needs to be something that consumers use frequently.  What’s next?  I suggest the Apple Bank Card – a virtual credit card.

The Apple Bank Card would replace debit and credit cards in the same way that PayPal and Square have begun changing how we pay merchants when we shop.  Why can’t Apple digitally disrupt the credit card industry?  Apple has hundreds of millions of users with their Apple iTunes accounts attached to their credit cards.  One-click and you can buy just about any song, movie, app, book, and even Apple devices.  Apple has over $100 Billion in cash and securities and investors and analysts have been clamoring for them to put that cash hoard to use.  Why not use it to provide a line of credit to customers, gather analytics on shopping habits, and make interest on late monthly payments?  Why not extend  Apple devices to become the new Bank Card for shopping anywhere?

How can Apple accomplish this?  It’s a Build vs. Buy decision.

  • Build: Apple builds NFC (Near Field Communications) in its devices and builds apps, APIs, all supported by back-end iCloud infrastructure.  No need for physical cards you need to carry.  Merchants everywhere that use iPads can accept payments from your iPod Touch, iPhone, or iPad wirelessly.  Of course, Apple would have to develop the software and apps to enable this ability.  I would also like to see them tie this in with Siri, but only if they can execute the voice recognition flawlessly (don’t want to over pay due to Siri hearing the wrong dollar amount).  Already, Apple has point-of-sales in their Apple Stores, why not extend this into the real world?
  • Buy: Apple acquires Square.  This seems to be a perfect match.  Square already has apps for iOS devices:  Square (virtual credit card), Square Register (virtual register machine), Square Card Case (pay with just your name in places you frequent often).  Additionally, Square gathers analytics about customer shopping habits and trends.  On top of this, Apple could discontinue support of Square on the Android platform.  As an added bonus, Jack Dorsey, the CEO and founder of Square is also the creator and founder of Twitter — which Apple has a good relationship with.  At one time, he was dual-CEO and founder of Square and Twitter — following in the footsteps of Steve Jobs who was once dual-CEO and founder of Apple and Pixar.  If Apple acquires Square and Dorsey stuck around, he might make a good addition to the already talented and formidable Apple Executive Staff.

Apple may also opt to build, buy, or both — build their own infrastructure, acquire Square, and integrate.  I see the Apple Bank Card as a bold move that Apple could make to disrupt a big industry, create a new source of income, as well as making efficient use of their large cash position.  This would create an additional “halo effect” in the Apple ecosystem.

Update: Apple was just granted a patent for iWallet.  Interesting.