Apple’s Stash of Credit Card Numbers Is Its Secret Weapon

screenshot via Apple


That little iPhone in your pocket is perfectly positioned to become a clone of the credit cards in your wallet or purse. And Apple can thank the music purchases on the iPod if and when it pulls this off.

On Monday at the Apple Worldwide Developers Conference, Timothy Cook, Apple’s chief executive, shared a number of impressive statistics about the Apple iTunes Store. There are 650,000 applications, 225,000 of which are specifically made for the iPad. To date, 15 billion apps have been downloaded from Apple, too.

Though the truly startling number Mr. Cook shared — and note that he spelled it out to the developers — is that Apple now has 400 million active accounts in iTunes with credit cards. That means that all of Apple’s iOS devices are linked to those credit cards, too.

Think about that for a moment. While companies like Google have been trying to shift consumers to use mobile phones to pay for products, rather than cash or cards, one of the biggest hurdles stopping consumers has been the laborious task of linking a smartphone to a plastic credit card. People who have tried to use services like Google Wallet initially have to type in long lists of numbers, addresses and more. A barrier, to say the least.

Yet if Apple decides to get into the payments business — and it is very likely the company will, based on patents it has filed in the past — it will have a much easier time converting customers.

In fact, Apple already has.

Once someone logs into an iPhone and downloads or syncs music or apps, the iTunes account is automatically linked to the phone, as is the credit card and payment information. All the company needs to do is resolve how payments would happen with a card.

Once such experiment might be happening in front of our eyes. Passbook, a new iOS app that was featured at the conference, appeared to offer a preview of how payments would actually be made. Passbook stores airline boarding passes, gift cards and movie tickets in one place on a phone.

Passbook doesn’t actually handle credit card transactions, yet, but if Apple ever decides to link it to customers’ iTunes accounts, it could easily replace the credit cards in your wallet or purse.