Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Even Without Payments, Apple Inc. (AAPL)’s Passbook Is Taking Off

Investors are widely expecting Apple Inc. (NASDAQ:AAPL) to get into the mobile payments game sooner or later, especially after CEO Tim Cook mentioned that the company now has 575 million active iTunes accounts with credit card information just a click or tap away. That makes its active user base nearly three times that of, Inc. (NASDAQ:AMZN), the largest e-commerce company in the world.

Passbook in iOS 6. Source: Apple.

Apple’s stepping stone until then is Passbook, which aggregates other wallet-related items like gift cards, loyalty cards, and more. Even though Passbook doesn’t offer any type of uniform payment method that links to a credit card, the app is already taking off in popularity among retailers and merchants.

Should this Concern Apple Inc. (AAPL) and Google Inc (GOOG)?

GigaOM recently spoke with CashStar marketing exec Gene Cornfield about Passbook’s potential. CashStar helps many well-known retailers create digital gift cards, so it has valuable insight into how Passbook is progressing. The company says that approximately 33% of gift cards that are sent are opened on a smartphone, and 66% of these smartphones run iOS 6. Roughly 30% of these gift cards are subsequently added to Passbook.

Cornfield told GigaOM that many retailers were skeptical at first, but eventually warmed up to the idea as users began to understand its value proposition. Using gift cards is currently the best way for users to spend money at retailers, with CashStar saying “millions of dollars” have been processed through Passbook.

The location-based reminders also help users remember to redeem cards once they are near a store. Companies only recognize gift card dollars as revenue once the funds are spent. Reloadable store-specific cards are also helping retailers make payments. I use the Starbucks Corporation (NASDAQ:SBUX) card in my Passbook all the time to buy coffee, which reloads automatically.