Google provides Google Wallet, which supports NFC payment technology, and the team says they are working on integrating Bitcoin.
Ariel Bardin, Vice President of Payments at Google, asked a Redditor to prompt the community with “What would I want Google to do with Bitcoin?” so he could observe the conversation.
Microsoft offers a digital wallet as well, but it’s unclear whether it will support Bitcoin or other cryptocurrencies.
Notably absent from the conversation is Apple, which many perceive as cautious about entering new markets until a clear opportunity presents itself. At present, Apple’s payment support is limited to on-device purchases such as apps, music and media, rather than broader bank-backed payments.
Regardless of whether Bitcoin, Dogecoin, Coinye or another digital currency becomes dominant, a trusted, user-friendly digital wallet will be essential for mainstream adoption.
Apple’s head of e-commerce, Jennifer Bailey, is reportedly conducting interviews for serious candidates to expand the company’s payments capabilities, according to a source close to the situation. Through iTunes and related services, Apple already maintains extensive customer data and payment relationships.
E-commerce delivered via iTunes, iBooks and the App Store is Apple’s second-fastest-growing business and is likely to become its second-most-profitable segment.
During a question-and-answer session earlier in the year, Tim Cook, Apple’s chief executive, described mobile payments as “a big opportunity.” “The mobile payments area in general is one we’ve been intrigued with. It was one of the thoughts behind Touch ID,” he said.
Touch ID distinguishes Apple within the mobile payments space. Google cannot mandate a fingerprint scanner across all Android devices because it lacks full control over hardware manufacturers. For accessible yet robust security, Touch ID could give Apple an advantage.
At present, Apple has not fully leveraged Touch ID’s potential. Many expected the feature to secure the Passbook app (now Wallet), but it is primarily used to unlock devices and confirm App Store purchases.
The rumored Apple Watch could offer another opportunity to rethink mobile payments. Picture tapping your watch at a payment terminal, with transactions authenticated via Touch ID on a paired device.
More details may emerge at Apple’s Worldwide Developers Conference (WWDC), which this article notes was scheduled for June 2–6, 2014.
Digital currencies appear poised to play a significant role in the future of commerce; the question is how long it will take for them to become routine. Bitcoin currently leads adoption, despite early associations with illicit activity, and at the time of writing a single coin was valued at approximately $442 (£263).
With high-profile black market sites like Silk Road being shut down, interest in cryptocurrencies is shifting toward legitimate uses. A notable example includes a buyer who purchased a $103,000 Tesla Model S with Bitcoin, and there are specialized dealers such as CoinMotors catering to buyers using digital currencies.
Local businesses have also started accepting Bitcoin, and the demand is significant enough that Yelp added a filter to help users find nearby merchants who accept the currency.
Governments and regulators are actively considering how to treat, tax and oversee currencies that exist only in digital wallets. That presents substantial challenges: exchanges such as Mt. Gox have been vulnerable to attacks and lost hundreds of thousands of coins, highlighting the risk of holding funds without government-backed deposit protections. Losing Bitcoins can be as irreversible as having cash disappear.
Regulatory approaches vary by country. The UK announced it would treat Bitcoin as property for tax purposes after initially considering it a voucher; the United States adopted a similar position. In mainland China and Taiwan, financial institutions are restricted or banned from handling Bitcoin transactions. In Iceland, the use of Bitcoin is illegal for any purpose.
Will Apple enter the mobile payments market this year?