I believe that one day, very soon, paying for things with your phone will be very commonplace. I believe that phone carriers, stores, and credit processing firms will all get a slice, and so mobile payments will be a transition, not a war, and therefore much more possible. I do not believe Apple’s Passbook, at least in its current styling, will play any significant role in getting us to this near future.
Passbook is a featured new app in iOS 6, intended to be used as a holder for coupons, boarding passes, event tickets, and rewards cards. The way Apple pitches it, Passbook is tied deeply into your iPhone, being smart enough to pop up on your screen when you have tickets and you’re near an airport or concert venue, or to bring up your coupons and customer card when you wander toward a Target or Starbucks. And retailers, you would think, would be all about getting convenient spending into the hands of iPhone owners. Win, win, win, at least from appearances at the outset, and after Google Wallet disappeared from my Verizon Galaxy Nexus last week, I was keen to see how digital payments worked inside Apple’s curated, controlled market.
Not much better, it turns out, and the problems with Passbook are much more inscrutable, if not outright worse. To add cards and retailers into Passbook, you are sent from Passbook into a special section of Apple’s App Store. Except that, at least for a while, when you arrived at the Passbook store, you were usually denied and told you “Cannot connect.” There is a weird fix that involves setting your phone’s internal clock one year ahead, and you have to remember to undo that fix, or else lose access to your iMessages synchronization. A quirk, but one that can be fixed from Apple’s side pretty quickly.
Not so easy to fix is the basic operation of Passbook. You’re adding an app to your phone’s home screen for each retailer you want to add into Passbook—easy enough to shove them all into a folder, but somewhat off-putting, and potentially space-wasting. Even after you add the Passbook-supported apps, you often have to actually “use” the store apps to activate Passbook integration, which usually means a purchase or setting up a new account. In some cases, you’ll have to confirm you Passbook and store integration through emails or text message confirmations. And then there’s actually using Passbook at the store.
Update: Matthew Panzarino, news and Apple editor at The Next Web, points out that home screen app installations are not necessary for Passbook integration, and cites services such as Tickets.com, American Express, and Billguard as having full Passbook integration without a separate app requirement. He is right; I was overly negative and generalizing in my take, and some companies are doing Passbook right. But as for Passbook itself ...
From my objectively above-average experience with trying to pay with things with my phone, it’s only occasionally faster than swiping your card at merchants that have simple card reader systems installed. You usually can’t swipe the face of your phone over the table-top (single-red-line) scanner, but ask the cashier to use their hand-held (”spinning red matrix”) scanner. Second, you have to be brave enough to believe your phone is going to work as you expect it to when there are customers in line behind you. Third, if anything doesn’t go completely, quietly perfect, you are at the mercy of the particular venue you are visiting. Some employees and managers won’t have any idea that their national office is now offering phone-based coupons and tickets. Some locations won’t have the right scanners or hardware in place.
Combine that offline uncertainty with the quirky online setup, and you get the sense that Passbook is more of a novelty, built almost exclusively for those in very large cities, than something that’s ready for the iPhone general populace. Darrell Etherington from TechCrunch journaled his unpleasant movie-tickets-with-Passbook experience, and it’s worth noting that Darrell, like myself, uses and analyzes technology for a living. Most people have a much lower tap-and-fiddle tolerance.
For now, then, the pay-by-phone transition is led most ably by individual merchants that train their staff to accept and encourage phone payments. And Starbucks. Starbucks is propping up Square’s mobile payment system, and its own app is a very convenient alternative and supplement to its fully built-out Starbucks Rewards Card system, letting you manage cards and check rewards from the app itself. Starbucks is part of Passbook, but using it there isn’t any better than Starbucks’ own app. That’s a fair and smart metric that any phone-as-wallet system needs to achieve, and none of them quite get there.