Has Apple’s Passbook Pushed Business Into the 21st Century?

Apple’s (NASDAQ:AAPL) Passbook application, which acts as virtual file folder for receipts, tickets, and loyalty rewards cards, has helped businesses take advantage of the growing application market. As Wired reported on Thursday, companies that have developed apps for Passbook, like AMR’s (AAMRQ.PK) American Airlines and Sephora, have had them downloaded tens of thousands of times since the platform was released in June.

While Passbook is like a mobile wallet, it is very different from Google (NASDAQ:GOOG) Wallet’s digital payment system, which requires businesses to support NFC technology. For Passbook to work, retailers only need to be able to scan QR or ticket codes. Although the application can be used to make purchases at some stores, like Starbucks (NASDAQ:SBUX), its primary strength lies in its system of aggregating coupons, gift cards, and boarding passes. It also reminds users that they have deals or gift cards to use at stores near their location.

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Many early adopters of the application have found that Passbook has spurred download rates of their apps. “We were amazed at the high uptake,” said Phil Easter, American Airlines’ director of mobile apps, to Wired. “Apple has allowed an app developer like us to put features right in front of the user where before, that space was off limits.” Within 10 days of launching its app, American Airlines recorded 1 million downloads, and the airline currently has 1.5 million active Passbook users.

But there are glitches to be ironed out; customers have complained that some apps make creating a pass difficult. However, Belly CEO Logan LaHive, whose company created a digital loyalty program for small businesses, said that the confusion was not surprising. “It’s a brand-new product,” he said. “It’s a major potential shift with how people interact with their phone.”

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