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Inside Apple's secret plan to kill the cash register

Mike Elgan | May 21, 2012
Apple's plans for a Bluetooth 4.0-based iWallet could be the beginning of the end for the venerable cash register.

How Apple will kill the cash register

The point-of-sale industry (made up of companies that make and sell cash registers and the software and networked systems that support them) is in crisis. Apple's iPad is growing as an alternative to big, heavy cash registers and their hard-to-learn systems and interfaces.

Small retail businesses are opening their doors without ever buying a cash register. Instead, they're using iPads that use Square technology, or something similar, to handle the main functions of cash registers -- at a fraction of the cost.

Yet iPad-based point-of-sale systems don't involve digital wallets. The payment medium is still an old-and-busted credit card.

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.


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