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iPhone owners wait for what's in the cards with Passbook

Few know how exactly it will work, but iOS device owners and businesses will soon get the chance to jump on board with Passbook. The new feature debuts this week, when Apple releases its iOS 6 update on Wednesday.

First introduced as part of Apple's iOS 6 preview during June's Worldwide Developers conference, Passbook stores boarding passes, movie tickets, coupons, and gift cards on your smartphone and acts as a digital wallet of sorts. Apple touts Passbook as being location-aware--that gift card will appear on your iPhone's lock screen when you walk into a store, for example--and as a one-stop storage space for the kind of digital data you'd normally stuff into a wallet.

What Apple hasn't done is provide much in the way of specifics about how Passbook will work. Last week's press event to introduce the iPhone 5 merely recapped what the company had already said about Passbook back in June and on its website.

Still, app developers, airlines and entertainment executives are leading the charge to Passbook adoption. Last week, for example, ticketing website Accesso announced integration with Passbook for theme parks and attractions that use the platform. Ticket-buyers will be able to import passes to some of the company's clients, which include 11 Cedar Fair Entertainment theme parks across the country and the Columbus Zoo and Aquarium, into Passbook.

Sephora, Ticketmaster, Starbucks, Target, and Fandango have also been included in Apple's promotional materials for Passbook.

Apple has not yet revealed an official list of partners (and the company did not respond to our request for comment), but reports indicate that Delta, United Airlines and American Airlines are planning to integrate boarding passes with Passbook. Virgin Australia confirmed its Passbook plans a week ago after a passenger running a beta version of iOS 6 checked into his Sydney flight and Passbook popped up on his phone.

Several airlines have individual apps that let you check into flights. But Passbook rolls all a traveler's information into one easily accessible app. What's more, Passbook's location- and time-aware features make it a dynamic app: Apple says your boarding pass will automatically update with new gate information should there be a change with your flight, for example.

The appeal of Passbook for airlines is evident as well: Travel technology consultant Norm Rose notes that the iOS 6 feature gives airlines the opportunity to collect more information on passengers that may not be frequent fliers or that don't fly a particular carrier often enough to download a standalone app.

Rose said if airlines have access to more detailed itineraries, they can offer a range of benefits to passengers beyond just easier check-ins, like free hotel vouchers if flights are delayed, seat upgrades, car service, and other rewards.

There are privacy concerns to be considered with the move toward digital wallets, but Rose said if customers have opt-in privileges, the advantages could be substantial.

"If someone were to take my wallet, they [would] know an awful lot about me," Rose said. "They're going to see my insurance card, know what credit cards I have. But there's also an understanding of the customer. The travel piece that's coming first, the boarding pass, is one little piece of the puzzle."

Another piece could be near-field communication (NFC), a short-range wireless technology used for digital payments. But that's not part of Apple's plans at the moment--the newly unveiled iPhone 5 doesn't feature include any NFC technology. And Apple executives have indicated that decision reflects the demands of the market. "Passbook does the kinds of things customers need today," senior vice president of worldwide product marketing Phil Schiller told AllThingsD in the wake of last week's press event.

Rose said he was surprised the iPhone 5 didn't include NFC technology, given that Apple holds a patent for a travel-management system that incorporates NFC. Retail analyst Greg Buzek, president of retail and hospitality consulting firm IHL Group, said Passbook would be more beneficial to retailers with NFC technology, adding that Passbook runs the risk of slowing down transactions when cashiers have to scan coupon or gift card barcodes from smartphones, if the store even has the right type of scanner.

"And what happens if the cashier drops [the phone]?" Buzek says. "Whose liability is that?"

But a recent CreditDonkey.com survey indicated that 68 percent of U.S. shoppers prefer using credit and debit cards to digital wallets. Retailers are also slow to adopt NFC technology. Aite Group reports that only 2 percent of merchants worldwide have terminals that can recognize NFC chips.

Buzek said more infrastructure build-out is required on the part of both Apple and its retail partners to make Passbook a success for consumers. But if pre-release buzz is any indication, Passbook may be to wallets what the company's iTunes Store was to records and CDs.


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