Inside Apple's secret plan to kill the cash register

Apple has already built technology into iPhones and iPads to make retail stores work like the Apple store -- without cash registers

1 2 Page 2
Page 2 of 2

Apple's iWallet digital wallet will eliminate the need for both the cash register and the credit card. Why? Because it will use Bluetooth, rather than NFC, according to Pablo Saez Gil, a retail industry analyst with ResearchFarm.

Apple's solution is already deployed

I told you back in March what I thought the new iPad's best feature was: Bluetooth 4.0.

Apple, which is notorious for being slow to market with brand-new technologies, was conspicuously early when it came to Bluetooth 4.0. At the time they shipped, the iPhone 4S and the iPad were the only major phone and tablet models to support Bluetooth 4.0.

Why so aggressive with Bluetooth 4.0, Apple?

Gil's answer: Bluetooth 4.0 is Apple's answer to the digital wallet and an alternative to NFC.

For starters, Bluetooth can go into ultra-low-energy mode, passively making connections and transferring the information necessary to conduct a financial transaction. And it can make those connections at much greater distances than NFC can -- up to 160 feet -- eliminating the need for a customer to go to a checkout counter to use an NFC reader.

Everyone has been waiting for Apple to announce the beginnings of a digital wallet system, followed by years of development, rollout and evolutionary acceptance.

But the Bluetooth 4.0 theory means that Apple could announce iWallet software -- an app, backed by a new service from Apple -- and the program would come into being overnight.

No doubt payment would happen through iTunes accounts as detailed in Apple's iWallet patent, and Apple would receive a micropayment with every transaction.

Apple has built Bluetooth 4.0 into every computer, tablet and phone it has shipped since the middle of 2011, representing millions of users. The world does not have to wait for a gradual NFC rollout. The underlying wireless technology has already been deployed at scale.

Note that Apple has not announced a Bluetooth 4.0 digital wallet system. But after considering Gil's analysis, I believe that the introduction of such a system would explain why Apple rolled out Bluetooth 4.0 so aggressively. It would also be in line with Apple's obvious contempt for cash registers, and it would greatly enhance Apple's effort to take over retail point-of-sale systems with the iPad.

Bluetooth 4.0 would enable retail stores to roll out instant iWallet point-of-sale systems that use iPads or Apple desktops or laptops. These systems would eliminate the need for iPhone owners to go to a checkout counter or use a credit card.

Stores using cash registers and Google Wallet could also cheaply and easily offer Bluetooth 4.0 iWallet solutions as well. That would give iPhone users the retail equivalent of the airlines' "business class" status; unlike users of credit cards or Google Wallet, they wouldn't have to wait in line or even go anywhere near a checkout counter to pay for their purchases.

In restaurants, credit card transactions would continue to require servers to make two trips between the table and the cash register -- one to carry the card to the register for approval, and the other to punch in the tip and file the signed credit card slip.

For its part, Google Wallet would require just one trip -- for the waiter to bring an NFC device to the table.

But Apple iWallet users wouldn't need the server at all: They'd just pay on the phone and go.

If Bluetooth 4.0 makes it possible for Apple to simplify restaurant and retail payments to that extent, users would have an incentive to switch to iPhones, restaurateurs and store owners would be inclined to switch to iPads, and financial services companies, including credit card companies, would be willing to play ball with Apple.

It would also give Google an incentive to embrace Bluetooth 4.0 payments as well.

Apple would be crazy not do to it.

If a Bluetooth 4.0-based Apple iWallet is a success, it could be the beginning of the end for the venerable cash register.

Mike Elgan writes about technology and tech culture. You can contact Mike and learn more about him at Elgan.com, or subscribe to his free email newsletter, Mike's List. You can also see more articles by Mike Elgan on Computerworld.com.

Copyright © 2012 IDG Communications, Inc.

1 2 Page 2
Page 2 of 2
7 inconvenient truths about the hybrid work trend
Shop Tech Products at Amazon