Is Apple's Passbook the Stealth E-Wallet Success?

NEW YORK (MainStreet)—Just when most digital wallet experts had forgotten the year-old Apple Passbook --widely dismissed as ineffectual and neutered -- a discordant voice wants to get an unexpected message across: just maybe Passbook is the stealth winner of the early rounds of the e-wallet wars, and it is doing it by sneaking in a powerful but largely uncommented upon transaction capability.

Also see: Fear and Loathing with the Digital Wallet

"We are seeing many, many dollars added into Passbook and spent by consumers," said Gene Cornfield, a vice president at CashStar, a digital e-gift card company that works with an A list roster of companies from Starbucks to the Gap and Dell to Sephora.

The knock against Passbook - introduced by Apple at the annual Worldwide Developers Conference 2012 - has always been what it doesn't do which is that it cannot be coaxed into use as a tap and pay digital wallet. From the beginning, critics have been scathing that the bowdlerized app disappoints - but maybe there is more to this story. Just maybe Passbook, which runs only on iPhone, has another, enticing side that has stayed largely hidden.

At least that is Cornfield's message, which he released in sync with Apple's WWDC 2013, which wrapped this week in San Francisco. His contention: Passbook already packs a potent transaction capability. "Every day we are seeing many consumers paying with Passbook on their iPhones," said Cornfield.

The key is that Passbook - billed as a kind of digital repository for loyalty cards, airplane tickets, and the other stuff we cram into leather wallets - has the ability to store e-gift cards that can be used at point of sale. Dozens of cards - available through the Apple Store or the associated app -- are sold in amounts that climb as high as $2,000 and they are as good as cash at the issuing merchants.