Apple’s Smart Move

Expands contactless student ID in the US as it looks for services growth

This week, Apple announced that it’s expanding its contactless student ID programme to 12 more universities in the US. As students return from their summer break, they’ll be able to use their iPhones and Apple Watches to gain entry to locked doors, and to use their Apple devices as an alternative to physical ID cards.

The contactless ID system will not only offer key and ID alternatives, but also work as a payment mechanism for on-campus transactions. This means that students at participating schools will be able to pay for things like meals, textbooks and other school supplies on their college campus.

Apple originally announced the contactless student ID programme at its Worldwide Developers Conference in 2018, and then rolled it out in October of that year to seven universities, namely Johns Hopkins, Marshall, Mercer, Duke, the University of Oklahoma, the University of Alabama, and Temple. With the expansion to 12 additional universities, the programme now covers 19 schools, a fraction of the more than 5,000 post-secondary schools in the US.

Apple says that 100,000 scholars can now use contactless student ID through Apple Wallet. The company is also adding support for providers of solutions for campus credentials and mobile access including CBORD, Allegion and HID, thereby expanding the options universities have when it comes to compatible mobile access systems. The launch of iOS 11 brought Core NFC, a framework that lets developers tap into the iPhone’s on-board NFC chip to scan NFC Data Exchange Format data tags. In the iPhone XS family, the system automatically reads tags in the background and delivers the data it collects to the appropriate apps.

There are 20 million college-level students in the US, making this an addressable market larger than that of most countries. It’s a wise move for Apple in trying to establish a de facto standard here, which gives it a huge opportunity to lock in a whole generation of users. Furthermore, there’s a high probability that if students come to rely on their iPhone for much more than the standard suite of smartphone functions, they’ll be tempted to buy into the broader Apple ecosystem of hardware, software and services.

As smartphone sales sag as a result of market saturation and longer phone replacement cycles, Apple needs to grow its services business to make up for lost hardware revenue from the iPhone. This latest effort is further evidence of Apple expanding uses for Apple Pay and Wallet, in addition to the recent launch of the Apple Card and a test that lets commuters use Apple Pay at some bus and subway stations in New York. By encouraging users to adopt these services, it undoubtedly increases “stickiness” to its platform, lowering the odds of users switching to Android.

Addressing the educational market has been in Apple’s DNA almost since the company was founded. It’s a smart move working with universities and their students to make its ecosystem part of their ecosystem.