Apple CEO Tim Cook detailed in an April 23 earnings call what many have believed will be the foundation for Apple's entry into payments: a strong iTunes customer base.

"We now have almost 800 million iTunes accounts, most of these with credit cards," Cook told analysts during a conference call to discuss earnings for its second quarter, which ended March 29. "This is a staggering number."

Apple generated record billings of $5.2 million in the second quarter in the iTunes store, an increase of 24% over the previous year driven by App Store sales, according to Luca Maestri, Apple's vice president and corporate controller.

The iTunes account number "shows the potential that Apple could have in the payment space should they decide to move beyond iTunes and into other retail spaces," says  

Thad Peterson, analyst with Boston-based Aite Group.

The challenge for Apple is capturing the attention of enough retailers to bring value to those 800 million cardholders, Peterson says.

"Retailers are already dealing with an abundance of payment channels from cash and cards, all the way out to PayPal, and adding another payment vehicle never replaces any other payment vehicle," he adds.

Apple would also be in a position to incorporate its Apple TV box more in a payments system. Cook said customers bought more than $1 billion worth of content directly off Apple TV in 2013.

Cook no longer considers the company's TV box offering as "a hobby," he said, as Apple TV is proving its potential.

"We've sold 20 million of the Apple TVs, so we've got a pretty large install base there," Cook said. "I'm feeling quite good about that business and where it can go."

Apple may also need to strengthen Apple TV's appeal in the face of new competitors like's Fire TV, which supports the Amazon Coins virtual currency.

Payments companies have already begun positioning themselves for the upcoming generation of smart TVs. MasterCard's processing subsidiary DataCash partnered with TV App Agency last year to provide a payment gateway to handle purchases made through specially equipped televisions.

Terminal maker Ingenico has also made overtures about the potential of making payments through TVs, saying it could build its NFC terminal chips into TV sets in the future.

Apple would likely incorporate Apple TV into any payments scheme it creates, Peterson says. "A logical first step would be to leverage iTunes payment capabilities into the existing Apple line whenever possible," he adds. "It immediately adds value to both the product and iTunes and reinforces the brand."

Earlier this week, media reports indicated that Apple is interviewing candidates for payments roles, a move that coincides with the various patents and other assets that the Cupertino, Calif.-based computing giant has gathered as the foundation of a payments business.

Cook also expressed his interest in payments during the first-quarter earnings call in January.

Technology analysts have also predicted that Apple will reveal an "iWatch" smartwatch this year that will include a secure element, Near Field Communication capabilities and support for biometrics — all technology that the company can deploy for payments.

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry