The Keys to Apple Pay: Ecosystem, that lovely chime, and above all, trust.

The opportunity: create a contactless mobile payment system that is truly seamless.

The solution: integrate the stack as only Apple can.

September 9th’s Special Event solidified the company’s’ dominance once again in the categories of mobile hardware and software with the iPhone 6, while simultaneously opening the doors on an entirely new category for Apple in wearables (which many are recognizing as Cook’s first category-defining product since Jobs’ death in 2011). But amidst the glamour, stunning design, and impressive core technology breakthroughs, there lay another of Apple’s brilliant platform maneuvers — one that will be remembered in history. This time in the category of payments.

Apple Pay, like its now decade old predecessor, the iTunes store, will over time prove to be a strategic integration of another industry “stack” that yields Apple the kind of market dominance, access, and ecosystemic oversight and control necessary to continue the company’s saga of relentless innovation and growth. At the heart of this technology is trust—both in the brand and its capability to deliver on the promise of world-class user experience independent of product category—as well as customers’ trust in the company’s use and administration of their personal data (including the current 800 million credit card’s it has on file, making it the holder of the largest credit card database on earth—and enabling this kind of unique breakthrough maneuver).

The service is right on time. The payments space is currently fragmented, with players like Paypal, Square, and Stripe vying for control of various aspects of the payments value chain, while the technology’s most direct competitors, Google Wallet, which, along with Isis (recently rebranded as “Softcard”—a joint venture consistent of the most prominent mobile carriers), have both struggled for widespread user adoption. Enter Apple to integrate the payments stack as only they can.

First, let’s walk through how it works. Apple Pay leverages Touch ID technology to verify the user’s fingerprint to authorize payment. That couples with existing secure element technology (the same kind found in Android), which simulates a credit card number and security code for each transaction, providing one-of-a-kind security for purchasing—this technology is second only to Bitcoin-level anonymity, more on that in a later post…). This data is transmitted via iPhone 6’s industry-standard NFC hardware, which wasn’t included in the iPhone 5s (to the dismay of some…but now we know why!) to one of the now 220,000 tap-to-pay NFC receivers within retail establishments around the country. And while that transmission’s happening, you’ll hear a beautiful, recognizable tone, which Tim played twice for the audience in Cupertino, “in case you blinked and missed it.” This tone, soon to be known across the globe as the sound of a payment-being-made, exemplifies Apples platform-level integration of hardware, software, brand, and partner ecosystem.

Rather than charging users fees, or tracking their data (as Google, and Wallet are now famous for), Apple is making a play to become the best and most widely used way that customers pay for things. By approaching this space in this fashion, the doors open for Apple Pay to evolve much as iTunes has over the past decade. The relationship between the two is not just a nice analogy, however, it is much more genealogical—even bordering on incestuous. After all it is the success and adoption of the iTunes store, beginning with the sale of just 200,000 participating songs—**that number being staggeringly close to the 220,000 stores that currently accept Apple Pay its on day one**—which amplified the sale of state of the art hardware of the day (the iPod)—that began the platform’s growth in 2003. iPod and iTunes quickly became the way that we, as digital consumers, listen to music.

It was the growth of this platform and the adoption of the iPod that led Apple deeper into the mobile technology arena, resulting in the first iPhone in 2007, followed by the App Store in 2008 accompanied by the iPhone 3g—redefining the way we talk, text, work, and, ultimately, live. These combined platforms, with their accompanied hardware, over time led to to Apple’s aggregation of user’s credit card numbers, and, above all, their trust. Not to mention the 1.3 million apps now available on the app store, the creation of which exemplify the growth of what could be characterized more as a whole new economy than a single market.

As Apple Pay becomes the most trusted payment method in the world, and more and more users adopt it, Apple will, once again be poised to create an entirely new economy around payments—leveraging and encouraging both users and retailers to build around the new platform. And it doesn’t hurt that this time, the unit being leveraged is the transaction itself—something far more funadmental than the computer, music, or even the telephone. By integrating themselves with the act of paying for things worldwide, Apple is splicing its DNA into the very fabric of the global economy for the long-term. Like BitCoin, Apple could become be an arbiter of transactions, potentially upending—or creating the conditions for other startups to upend—the role of countless intermediaries like merchant banks, credit card processing companies (not to mention other companies higher up the payments stack like Square and PayPal), as well as major credit card companies themselves, and even major banks. The implications of the transformation of payments over the next decade aren’t yet clear, but if the analogies of the growth of iTunes and the App Store provide us any guidance, we can be sure that there will be a vast market created, causing the growth of disruptive companies like Uber and AirBnB.

By owning the marketplace for third-party developers to build innovative payment apps that interface with Apple’s hardware and software suite, and connect to credit card issuing companies and banks in a variety of ways, Apple will once again take its seat as the purveyor and overseer of a vast technoeconomic ecosystem. This time, one more broad in reach than personal computing, digital media, mobile, or anything else the company has touched up until this point.

The key word here is leverage. With each subsequent platform play, Apple lays the foundation for its continued success by integrating the stack of hardware, software, brand, and partner ecosystem. This time, they’ve reached beyond the fabric of hard and soft ‘goods’ (like music, phones, and apps), and into the fabric of the economy—they’ve begun dealing in transactions. With this move, as Jason Calacanis predicts, Apple can easily become the world’s first trillion dollar market cap company. That is, if they don’t become a country first.