WSJ: Apple 'laying groundwork' for mobile payments system

Posted:
in General Discussion edited January 2014
A report on Friday claims Apple has expressed interest in handling payments for physical goods and services on its iDevices, suggesting a branded mobile payment solution is in the offing.

Payment
Apple patent illustration for a touchless mobile payment system. | Source: USPTO


Citing people familiar with the matter, The Wall Street Journal reports Apple CEO Tim Cook and SVP of Internet Software and Services Eddy Cue met with technology industry leaders to discuss a possible mobile payments system rollout.

Further, the publication learned that Apple tapped executive Jennifer Bailey to build out an in-company payment business. Bailey was previously in charge of running the company's online stores.

Apple is a late-comer to the mobile payments game as rival Google has been experimenting with so-called e-wallet technology for some time. In some implementations, Android handsets carry NFC technology that, in concert with Google Wallet, allow for touchless payments at supported POS systems. Despite early efforts and proliferation of smart devices that would serve as optimal platforms for the tech, a clear market frontrunner has yet to emerge.

With its various online properties, like iTunes and the Online Apple Store, Apple would have a huge installed customer base if it were to roll out a payments system. The sheer volume of credit cards on file would go a long way in convincing retailers to adopt an Apple-branded solution.

While Apple's methodology calls for a "go slow" approach, Over the past months, the company has been quietly laying groundwork that is quickly advancing toward a final solution. Passbook was released for iOS as a built-in app, though the software's functionality is currently limited to gift card, coupon and ticket redemption.

Most recently, iBeacon added another piece to the puzzle by granting iPhones the ability to make over-the-air payments. iBeacon's micro-location technology leverages Bluetooth Low Energy for two-way communication with in-store beacon nodes. Users can be alerted to deals, specials, store maps and other information, while providers can gather customer data.

In theory, iBeacon can be used as the backbone of a touchless payment system, though no signs of such an implementation have surfaced. So far, the technology has seen experimental adoption at a number of retailers like Macy's, as well as all U.S. Apple Stores.

Apple has filed for a number of patents regarding mobile payment, the most recent of which covered secure touchless payment systems.
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Comments

  • Reply 1 of 31
    asciiascii Posts: 5,941member
    Any trademarks for "iPay" being applied for?
  • Reply 2 of 31
    shogunshogun Posts: 360member
    "Final solution?" Yikes. Those two words shouldn't be used together. Too much baggage. Way too much baggage.

    Cool article content though. It's beyond me why it's taking so long. Perhaps they needed Toich Id to generate enough confidence. Perhaps it's also to be timed with the introduction of... New Apple TV that also works as an iBeacon pay center?
  • Reply 3 of 31
    rogifanrogifan Posts: 10,669member
    The biggest middle finger Apple could give Google/Nest/Wall Street/tech press would be to buy Square. I'd love to see them do it.
  • Reply 4 of 31
    Apple needs to come up with a way for me to securely process a transaction with the iPhone/iPad without the need to expose any of my credit card information to the merchant. All the recent POS system breaches at TJ Maxx, Target, etc tells us that that the current system is too unsecure and needs to be fundamentally re-designed.
  • Reply 5 of 31

    Interesting that their patent diagram includes NFC as well.

  • Reply 6 of 31
    Interesting and needed. The financial institutions are too incompetent to move to secure credit cards, like europe did decades ago. So, hopefully, Apple's solution will eliminate Visa, MasterCard and the whole lot of them, ending their expensive and useless monopoly.
  • Reply 7 of 31
    asciiascii Posts: 5,941member
    Quote:

    Originally Posted by waldobushman View Post



    Interesting and needed. The financial institutions are too incompetent to move to secure credit cards, like europe did decades ago. So, hopefully, Apple's solution will eliminate Visa, MasterCard and the whole lot of them, ending their expensive and useless monopoly.

    It should be possible to just transfer directly from your bank account to any company. Yes, the credit card companies are useless middlemen, but so would Apple be.

  • Reply 8 of 31
    I've mentioned this a few days ago and I will say it again. I predict that the next iPhone will include NFC. They will combine their own technologies, iBeacan, Bluetooth, and NFC. Why am I so certain? Because the latest generation of Broadcom Bluetooth and Wi-Fi combo chips (as well as chips from other companies) now include NFC. In other words, Apple doesn't end to compromise their circuit board real estate to make room for it. It comes with the chip they use for Bluetooth and Wi-Fi. If it's there, in the chip, it's in the phone. It's possible that iOS 8 could launch without code making it available to apps, but not likely.
  • Reply 9 of 31
    As noted above, the retailer's systems need to be made safe from attacks like the Target attack. The Target hack is especially important to Apple because it was tied to Target's POS terminals. Those are obviously the devices that Apple's iBeacon would be working with.

    In terms of current credit cards, millions (including me) have loyalty cards. Mine is a British Airways Visa from Chase and we have had a few trips to the UK & Europe with those miles, and another trip or two (depending on class flown) available now. I'll pass on any system that screws up that benefit for me.
  • Reply 10 of 31
    I've mentioned this a few days ago and I will say it again. I predict that the next iPhone will include NFC. They will combine their own technologies, iBeacan, Bluetooth, and NFC. Why am I so certain? Because the latest generation of Broadcom Bluetooth and Wi-Fi combo chips (as well as chips from other companies) now include NFC. In other words, Apple doesn't end to compromise their circuit board real estate to make room for it. It comes with the chip they use for Bluetooth and Wi-Fi. If it's there, in the chip, it's in the phone. It's possible that iOS 8 could launch without code making it available to apps, but not likely.
  • Reply 11 of 31
    Interesting that their patent diagram includes NFC as well.

    NFC is part of the disinformation and distraction Apple uses to keep the competition chasing their tails.
  • Reply 12 of 31
    Google and Samsung will make a big push to follow Apple into mobile payments but fortunately Apple already has all those credit card accounts on iTunes already. Too bad won't be easy for Google and Samsung to gather about 600,000 credit card holders overnight. Apple really should become a bank because they have enough cash to become one of the biggest banks in the U.S. I'd sure like to see it happen. It might even take Apple off the doomed list.
  • Reply 13 of 31
    wigbywigby Posts: 686member
    kenaustus wrote: »
    In terms of current credit cards, millions (including me) have loyalty cards. Mine is a British Airways Visa from Chase and we have had a few trips to the UK & Europe with those miles, and another trip or two (depending on class flown) available now. I'll pass on any system that screws up that benefit for me.

    Way to miss the big picture for a few trinkets.
  • Reply 14 of 31
    ralphmouth wrote: »
    Apple needs to come up with a way for me to securely process a transaction with the iPhone/iPad without the need to expose any of my credit card information to the merchant. All the recent POS system breaches at TJ Maxx, Target, etc tells us that that the current system is too unsecure and needs to be fundamentally re-designed.


    See this:
    Using a Shared Secret

    Apple notes that in one or more embodiments, a second secure link is established using a shared secret known to the portable device and the backend server, and using an alias to identify a purchasing account such as a credit card.

    When a request to make a transaction using the credit card is submitted to the backend server, the server determines whether the combination of the alias and crypto data is valid using a shared secret that is known to a secure element in the portable device and the backend server.

    The backend server uses the shared secret (e.g., symmetric keys, public private keys, etc.) to verify the alias and the crypto data. The backend receives the alias from the portable device via the point of sale device and combines the alias with other information, such as counter value known to both the backend and the secure element. The backend can then generate the same crypto data using the shared secret and received data, and compare the result with the received crypto data. If the comparison indicates that the values are the same, then the credit card that corresponds to the credit card alias is provided back to the partner, and the transaction proceeds as normal. Otherwise, the credit card alias is rejected and the transaction is denied.

    http://www.patentlyapple.com/patently-apple/2014/01/apple-patent-reveals-secure-iwallet-system-with-ibeacon.html#more
  • Reply 15 of 31
    wingswings Posts: 261member
    What I'd like to see is for Apple to bring this technology to retail with a bang. One holdup of making payments via phone and without a credit card reader (which all merchants have) is the equipment needed by the merchant. Forcing them to buy another device to handle an alternate payment system is a major hurdle. Apple should use some of their billions and simply give this thing away. Overnight they could become The Bank of Apple. Won't happen but I'd like to hope that it can.
  • Reply 16 of 31
    Can't wait to see what Apple can bring to the table. NFC has never really taken off and its current adoption has been a mess, despite what the Android apologists want us to believe.
  • Reply 17 of 31

    what about iWallet, or iMoney, or iShop, or iPurchase?

  • Reply 18 of 31
    Quote:
    Originally Posted by PeterAlt View Post



    I've mentioned this a few days ago and I will say it again. I predict that the next iPhone will include NFC. They will combine their own technologies, iBeacan, Bluetooth, and NFC. Why am I so certain? Because the latest generation of Broadcom Bluetooth and Wi-Fi combo chips (as well as chips from other companies) now include NFC. In other words, Apple doesn't end to compromise their circuit board real estate to make room for it. It comes with the chip they use for Bluetooth and Wi-Fi. If it's there, in the chip, it's in the phone. It's possible that iOS 8 could launch without code making it available to apps, but not likely.

    Don't hold your breath. I believe you will be proved wrong. 

  • Reply 19 of 31
    gatorguygatorguy Posts: 19,817member
    At least this WSJ story is based on better sources than yesterday's WSJ story of larger iPhones.
  • Reply 20 of 31
    irelandireland Posts: 17,538member
    I'd like to see an iBeacon device. Google imaging that term only seems to throw up some images of the tricolour, third-party Estimote product.
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