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iPay, iBuy and iCoupons? Latest patents show Apple has a clear business model for NFC-enabled mobile payments and promotions

A series of new patent applications demonstrate that Apple has a clear business model in place for the introduction of a comprehensive mobile payments, mobile commerce and mobile marketing business based around an NFC-enabled iPhone.

APPLE: NFC is set to play a key role in a new m-commerce business

A series of patent applications filed by Apple and relating to near field communication, mobile payments, mobile advertising and mobile coupons have been published this month. Together, the patent applications describe a comprehensive end-to-end mobile payments, mobile retailing and mobile marketing service that would put Apple at the centre of a major new mobile commerce business — and provide clear evidence that the company has a solid business plan in place for the introduction of NFC services.

Last week, we reported on Apple’s first four mobile payments related patents. The first two relate to peer-to-peer (P2P) payments and show an iPhone menu that would enable the user to choose from a variety of payments options at the time of purchase. Here, there is an indication that iTunes could evolve into a mobile currency, with mention of the service as one of the payments options along with bank transfer, credit and debit card options. The second pair of patent applications, meanwhile, cover the use of a ‘portable device’ — such as an iPhone — as a mobile point of purchase or POS terminal, able to capture information about an item for sale, determine its purchase price and process payments.

Now, two new patent applications entitled ‘Smart Menu Options‘ and ‘Real-Time Bargain Hunting‘ have also been published which together describe a comprehensive mobile commerce, promotions and payments service — including a clear business model that Apple could use to generate significant new revenues.

The abstract for the Smart Menu Options application explains that it primarily covers methods for choosing which payment option to use at the point of purchase:

Systems and methods are provided that allow for a portable electronic device to provide smart menus to a user based on a context of a transaction. Specifically, the method of using a portable electronic device may include opening a near field communication (NFC) channel with a point-of-purchase device and providing a smart menu based on a determined context.

The portable electronic device may be configured to determine the context based at least in part upon acquiring sales transaction information for the point-of-purchase device. Additionally, the portable electronic device may be configured to determine the context based at least in part upon acquiring vendor identification information.

As well as going into detail about how a user would choose which payment option to use at the point of purchase, and also describing the use of the iPhone to deliver transport ticketing applications, the patent application also describes in detail how Apple expects to generate revenues from the service.

The concept of a data manager, a manufacturer database, retailer database and consumer database are introduced alongside the concept of fees being charged to retailers and product suppliers by “the manufacturer of the device” for the delivery of coupons and other promotional services to consumers:

The manufacturer database may hold information such as brand name, model number, serial number, UPC code, product types or classifications, product descriptions, suggested retail prices, stores where the product may be available, a media file regarding the product, a web page address for obtaining more information about the product or purchasing the product, among other things. Furthermore, a manufacturer may chose to add information such as coupons, promotions and the like on a fee basis that may be taken into consideration by the device as part of the context of a particular transaction. The coupons and incentives may result in the affect the order (sic) in which payment options are presented or suggested to a user.

The data manager may also be coupled to a retailer database which may hold retailer specific product information. As with the manufacturer database, the retailer database may hold information that pertains to the products. Additionally, the retailer database may contain information relating to accepted forms of payment, preferred payment options (for which there may be an incentive for a user to use the preferred payment option), coupons and incentive information, among other things. The information contained in the retailer database may similarly affect the determination by the device of preferred payment methods. In some embodiments, a retailer may pay a fee to the manufacturer of the device, for example, to be included in the retailer database or to be able to modify the information in the retailer database to reflect current information.

In some embodiments, both the manufacturer database and the retailer database may contain advertisements that may be sent to the electronic device in response to the information request packet. The advertisements may either be presented directly to the user through sensory media reproducible by the device or indirectly by influencing the determination of suggested payment options. The advertisements may include promotional material related to the purchase of a product and/or marketing partners. For example, the promotional material may provide incentives to a consumer for purchasing the product using a particular payment method. Alternatively, the promotional material may provide incentives, such as a discount, for example, if the purchase of the product is combined with the purchase of another product from the manufacturer or from a manufacturer’s partner.

The data manager may also be communicatively coupled to a consumer database which may hold information related to the user of the electronic device. For example, the consumer database may include a preference profile of the user of the electronic device. The preference profile may include such information as specific retailers that the user prefers and/or specific modes of payment and products that the user prefers. The consumer database may also include information relating to terms such as interest rates for payment options available to a user. Additionally, the database may be populated based on information exchanges between the data manger and the electronic device which may indicate the shopping habits of the user. Additionally, the consumer database may also be populated by personal preferences identified by the user, an embodiment of which is described in relation to FIG. 19. In other embodiments, the information contained in the consumer database may also be included in the memory of the electronic device.

The abstract for the Real-Time Bargain Hunting patent application, meanwhile, provides details of a comprehensive mobile shopping system, again including the ‘iCoupons’ concept:

Systems and methods for providing shopping-related information to a consumer are provided. Embodiments of the system provide a consumer with shopping-related information, such as pricing information, product quality, consumer ratings, and other information that may help a consumer make an informed purchasing decision. Other embodiments allow a consumer to obtain and compare retail prices offered by several retailers for a specified product. Still other embodiments allow a seller to send targeted product information to a consumer who has indicated an interest in purchasing a specific product.

Further details on how Apple would generate fees from the provision of the manufacturer, retailer and consumer databases are then provided, along with details of how a consumers’ shopping habits could be used to automatically identify the kinds of promotional offers they would be interested in:

In some embodiments, both the manufacturer database and the retailer database may contain advertisements that may be sent to the electronic device in response to the information request packet. Such advertisements may include product related data, and/or media files such as picture, video, and audio files.

The data manager may also be communicatively coupled to a consumer database which may hold information related to the user of the electronic device. For example, the consumer database may include a preference profile of the user of the electronic device. The preference profile may include such information as specific retailers that the user prefers and/or specific brands of products that the user prefers.

The consumer database may be populated based on information exchanges between the data manger and the electronic device which may indicate the shopping habits of the user. Additionally, the consumer database may also be populated by personal preferences identified by the user, an embodiment of which is described in relation to FIG. 5. In other embodiments, the information contained in the consumer database may also included in the memory of the electronic device itself.

In some embodiments, the data manager and the databases may be a part of a system owned and operated by a single entity, such as a manufacturer of the handheld electronic device. In this embodiment, the operator may populate the manufacturer database and the retailer database with information provided to the operator by various product manufacturers and retailers in exchange for a fee.

Outside the payments arena, meanwhile, further patent applications related to the use of the iPhone as an NFC-enabled home networking device have also been published. Last week, we reported on a patent application entitled ”System and method for simplified resource sharing’ which explains how near field communication could be used to enable a wide range of devices to be paired together easily so they can share resources such as hardware, software and entertainment products. The devices mentioned in the application include everything from an iPod, iPhone, Apple TV and iMac to an NFC-enabled games controller, printer, DVR, projector, camera, keyboard and TV remote control.

Now, a patent application showing how the iPhone would be used as a universal remote control for an NFC-based home network has also been published, building on a suite of patent applications in the non-payments arena that, together with last week’s introduction of the iAd advertising plaftorm for iPhone OS 4, provide evidence that Apple’s involvement in NFC now goes way beyond the experimental stage:

  • http://www.emvx.co.uk/ emv x man

    It appears Apple’s sophisticated understanding of consumer electronics is not the only thing it has a well developed understanding of; certain coffee chains are going to swoon for this!

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