Just to be clear - I was responding to your comment which basically claimed NFC transactions were unsecure - as if the credit card companies/banks didn't think of something like this.
"All a crook has to do is install a small NFC reader under the terminal. Every single transaction they record is going to be a financial transaction. This is a gold mine for criminals."
This is basically misinformation for an existing product live in the marketplace.
Square is also hardly where Apple wants to play - they basically created a 'better' POS terminal with a modern UI, integration into smart devices, and simplified pricing. However, they fit into the payment ecosystem simply as another processor without changing the overall equation at all - you either swipe your card for it to go through as a magstripe transaction or you type it in for a card not present (CNP) transaction. And they happen to be bleeding money and basically looking for a buyer.
Say Apple does release a new Bluetooth method to pass payment credentials from your phone to a POS through some TBD whatchamacallit (BTW you painfully underestimate the sheer number of POS terminals globally as well as the certification process with each one to ensure end-to-end security). By default it will have to default to a CNP transaction which would be terrible for in-store merchants. Magstripe, chip and sign, chip and pin, NFC, etc are all certified delivery methods that are supported by the card issuer and enforced globally by the big payment networks (MC, V). You simply cannot create a new method by yourself and expect the payment ecosystem from processors to acquirers to the network to card issuers to magically support it. If Apple wants this new delivery method to be considered secure and not CNP, all of these parties have to be onboard. Otherwise guess what, it's CNP.
If Apple is truly going to release an in-store solution that they want to be used globally, I'd put my money that it will ride existing rails (most likely NFC) simply b/c Apple is smart enough not to get into the quagmire of the end-merchant world, globally. But for sure it'll add something new and likely a step forward in security. But it'll be with through playing with the other big players.
First off, I never said NFC was insecure. From the get go I stated that the close-coupling of NFC doesn't make it more secure than other forms of wireless. I was talking about the possibility of sniffing data from NFC vs BT or other wireless technology. All things being equal (the type of data being transferred) there's no difference in security. If there was useful data then it's easier to crack NFC because you can target your sniffer to an exact location to get only the data you need.
As to Apple implementing a payment solution, you completely missed my point. Apple doesn't need to make a system that works with current payment processors - Apple can become their own payment processor. That eliminates the majority of the issues you brought up. This is how I foresee and Apple system working:
- Store provides merchant ID and dollar amount to your iPhone over BT. You authorize the purchase and select payment method (credit, debit or gift card).
- Your device ID along with the merchant ID and amount is encrypted and sent to Apple over LTE/3G. No card numbers or personally identifiable information gets sent to Apple. Simply a request that this device wants to send money to that merchant.
- Apple checks your selected payment method, ensures funds are there and approves the transaction. An encrypted reference number is sent back to your iPhone. At the same time a matching encrypted reference is sent to the Apple POS system in the store over wired Internet.
- Your iPhone sends its reference number to the POS terminal which compares it to the one also sent from Apple (and also to an internal encryption key that's unique to every POS terminal).
- Retailer says thank you and lets you leave.
- Apple transfers money from their account to the merchant account.
BTW, This is similar to another market Apple has been rumoured to get into. TV. Apple doesn't want to sell people an Apple TV that still has to deal with cable networks and the idea of "channels and bundles". They want to distribute content a-la-carte, just like they do with music. They want to cut out cable companies and distribute content directly themselves.
Apple has no interest is adding a service on top of an existing system run by cronies who are slow to embrace new technology and are stuck in a 20 year old mindset.
Yup, a simple, economical system that's easy to use and implement. Despite that, how many retailers in Vancouver have you seen using them? The Tesla dealership on Robson does, only because it integrates with the iPads all the staff carry around anyway, but other than that... ? I can't say I've ever seen anyone else use it.
Square isn't designed to take on and eliminate the big processors. Why would a store that has Moneris (popular terminal in Canada) also start using Square? There's no advantage to them.
I didn't mention Square to claim they are an alternative to Moneris. I brought them up as an example of a small company that was able to set up their own payment system that's meeting the requirements of banks and credit card companies to offer an alternative to the big payment processors.
This flies in the face of kevlio1980's comments that setting up a new payment system is a Herculean task. It's not, and even less so for someone with the resources of Apple.
Why would a company add another black box to their counter to accept payments from Apple? Lower transaction fees.
First off, I never said NFC was insecure. From the get go I stated that the close-coupling of NFC doesn't make it more secure than other forms of wireless. I was talking about the possibility of sniffing data from NFC vs BT or other wireless technology. All things being equal (the type of data being transferred) there's no difference in security. If there was useful data then it's easier to crack NFC because you can target your sniffer to an exact location to get only the data you need.
As to Apple implementing a payment solution, you completely missed my point. Apple doesn't need to make a system that works with current payment processors - Apple can become their own payment processor. That eliminates the majority of the issues you brought up. This is how I foresee and Apple system working:
- Store provides merchant ID and dollar amount to your iPhone over BT. You authorize the purchase and select payment method (credit, debit or gift card).
- Your device ID along with the merchant ID and amount is encrypted and sent to Apple over LTE/3G. No card numbers or personally identifiable information gets sent to Apple. Simply a request that this device wants to send money to that merchant.
- Apple checks your selected payment method, ensures funds are there and approves the transaction. An encrypted reference number is sent back to your iPhone. At the same time a matching encrypted reference is sent to the Apple POS system in the store over wired Internet.
- Your iPhone sends its reference number to the POS terminal which compares it to the one also sent from Apple (and also to an internal encryption key that's unique to every POS terminal).
- Retailer says thank you and lets you leave.
- Apple transfers money from their account to the merchant account.
BTW, This is similar to another market Apple has been rumoured to get into. TV. Apple doesn't want to sell people an Apple TV that still has to deal with cable networks and the idea of "channels and bundles". They want to distribute content a-la-carte, just like they do with music. They want to cut out cable companies and distribute content directly themselves.
Apple has no interest is adding a service on top of an existing system run by cronies who are slow to embrace new technology and are stuck in a 20 year old mindset.
We'll have to agree to disagree and wait to see what Apple does.
If the originating payment method is still a credit/debit card, then at one level, what you have is a combination of Square and an acquiring bank. You still have the liability questions that arise as you, the consumer, used your credit card. Who takes liability for the transaction? The merchant? Apple? The consumer? This stuff just doesn't go away unless Apple is willing to take on this liability themselves.
If the originating payment method is used to source a new virtual currency which is the primary means of payment via your Apple balance, then you're describing a PayPal competitor. See PayPal's huge challenges in getting any B&M footprint as a warning - merchants are highly resistant to having support a completely second payment channel that is separate from their existing merchant account/acquirer accounting. Now Apple is even on the hook for global fraud management, merchant support, sales, etc. PayPal employs over 10,000 people - I'm not sure Tim Cook would be willing to have Apple split their focus like this.
Again - neither of us know what Apple is doing. I'd love to see Apple come out with a legitimate, global payment network on their own, but with their culture, I don't see them wanting to scale up the thousands of employees needed that can divert their attention from their core competencies.
We'll have to have a friendly wager that hopefully will be answered in a couple months - my horse is a new innovative method that rides on top of the major card companies and lets it ride their existing global merchant acceptance.
Well, there is such a thing as NFC smart tags, which could be smallish stickers.
Keeping your watch within a few inches from your phone is going to be inconvenient though.
You must carry a pocketwatch. I wear my watch a few inches from the hand I hold my iPhone in.
Do you continuously carry your phone in that hand -- or, do you sometimes put that phone in your pocket, purse, satchel, backpack, on the table, on the desk ... ?
Two points:
The watch has to be within >4-8 inches of the phone for NFC to initiate a connection
If the phone is off, the NFC in the watch will use additional power to wake up the phone
As I explained in an earlier post, BLE is a much better solution (faster, greater distance, less power).
Except Apple isn't going to use NFC at all. The focus is clearly on LE Bluetooth.
Quote:
Originally Posted by dasanman69
Then why all the NFC patents? Why spend R&D dollars on a technology that they're not going to use at all?
Because thats how you determine what you're NOT going to do, just as much as what you WILL do.
Quote:
Originally Posted by Lorin Schultz
All the buzz so far would suggest you're right, but making the iP6 unique in its ability to support a NFC payment system would sure be a good way to drive sales of the new device.
Drive sales? Average consumers do not have the vaguest conception of mobile payments, let alone NFC technology. NFC has zero ability to drive any sales of anything. "Mobile Payments" may be able to drive some sales, but powered by Bluetooth or NFC matters none on the surface.
Quote:
Originally Posted by Tallest Skil
Same reason they did it for the dozens of other features they never used.
Do you continuously carry your phone in that hand -- or, do you sometimes put that phone in your pocket, purse, satchel, backpack, on the table, on the desk ... ?
Two points:
The watch has to be within >4-8 inches of the phone for NFC to initiate a connection
If the phone is off, the NFC in the watch will use additional power to wake up the phone
As I explained in an earlier post, BLE is a much better solution (faster, greater distance, less power).
NFC is not happening. It it is old, unsecure, immature, pathetic technology. BLE is lightyears ahead, actually active in development, and already being built in to iOS devices.
If only the hardware itself was fast enough to truly take advantage of N.
Sure, you run a speediest and get OK speeds on the latest iOS devices. But not what a Mac gets, nor does an app like Safari load web pages anywhere near as fast as a Mac.
Maybe its unrealistic to expect it to be as snappy as a Mac. I still think it should be.
NFC is not happening. It it is old, unsecure, immature, pathetic technology. BLE is lightyears ahead, actually active in development, and already being built in to iOS devices.
Totally.
But.
The credit and debit card companies are pushing it, they want it everywhere. They will eventually get close to that, at least in the US and most of Europe, Japan and Korea are already there.
If Apple wants to go into mobile payment, can they ignore it?
I'm guessing 'no'. Depends on how fast the alternatives can move.
And if it does turn out to be 'no', next year's iPhone will be soon enough, right now it will be mostly useless for almost all iPhone users.
All the buzz so far would suggest you're right, but making the iP6 unique in its ability to support a NFC payment system would sure be a good way to drive sales of the new device.
Drive sales? Average consumers do not have the vaguest conception of mobile payments, let alone NFC technology. NFC has zero ability to drive any sales of anything. "Mobile Payments" may be able to drive some sales, but powered by Bluetooth or NFC matters none on the surface.
True in a conceptual sense, but in real life NFC payment terminals already exist and are in widespread use. BLE terminals are not.
So, it becomes the difference between "Use your iPhone to make payments at any merchant equipped with a touch terminal" or "Make payments at any merchant displaying the iO$ logo." Phrased that way, NFC certainly DOES have more power to generate device sales than a BLE approach.
Besides, the point I was making in that context was that making the iPhone SIX the ONLY iPhone capable of mobile payments, rather than making the feature backwards compatible with older iPhones, would be a way to encourage users of older iPhones to upgrade to the newer model. I should have left it at "mobile payments" and not mentioned NFC specifically. It was tongue-in-cheek anyway.
Comments
Just to be clear - I was responding to your comment which basically claimed NFC transactions were unsecure - as if the credit card companies/banks didn't think of something like this.
"All a crook has to do is install a small NFC reader under the terminal. Every single transaction they record is going to be a financial transaction. This is a gold mine for criminals."
This is basically misinformation for an existing product live in the marketplace.
Square is also hardly where Apple wants to play - they basically created a 'better' POS terminal with a modern UI, integration into smart devices, and simplified pricing. However, they fit into the payment ecosystem simply as another processor without changing the overall equation at all - you either swipe your card for it to go through as a magstripe transaction or you type it in for a card not present (CNP) transaction. And they happen to be bleeding money and basically looking for a buyer.
Say Apple does release a new Bluetooth method to pass payment credentials from your phone to a POS through some TBD whatchamacallit (BTW you painfully underestimate the sheer number of POS terminals globally as well as the certification process with each one to ensure end-to-end security). By default it will have to default to a CNP transaction which would be terrible for in-store merchants. Magstripe, chip and sign, chip and pin, NFC, etc are all certified delivery methods that are supported by the card issuer and enforced globally by the big payment networks (MC, V). You simply cannot create a new method by yourself and expect the payment ecosystem from processors to acquirers to the network to card issuers to magically support it. If Apple wants this new delivery method to be considered secure and not CNP, all of these parties have to be onboard. Otherwise guess what, it's CNP.
If Apple is truly going to release an in-store solution that they want to be used globally, I'd put my money that it will ride existing rails (most likely NFC) simply b/c Apple is smart enough not to get into the quagmire of the end-merchant world, globally. But for sure it'll add something new and likely a step forward in security. But it'll be with through playing with the other big players.
First off, I never said NFC was insecure. From the get go I stated that the close-coupling of NFC doesn't make it more secure than other forms of wireless. I was talking about the possibility of sniffing data from NFC vs BT or other wireless technology. All things being equal (the type of data being transferred) there's no difference in security. If there was useful data then it's easier to crack NFC because you can target your sniffer to an exact location to get only the data you need.
As to Apple implementing a payment solution, you completely missed my point. Apple doesn't need to make a system that works with current payment processors - Apple can become their own payment processor. That eliminates the majority of the issues you brought up. This is how I foresee and Apple system working:
- Store provides merchant ID and dollar amount to your iPhone over BT. You authorize the purchase and select payment method (credit, debit or gift card).
- Your device ID along with the merchant ID and amount is encrypted and sent to Apple over LTE/3G. No card numbers or personally identifiable information gets sent to Apple. Simply a request that this device wants to send money to that merchant.
- Apple checks your selected payment method, ensures funds are there and approves the transaction. An encrypted reference number is sent back to your iPhone. At the same time a matching encrypted reference is sent to the Apple POS system in the store over wired Internet.
- Your iPhone sends its reference number to the POS terminal which compares it to the one also sent from Apple (and also to an internal encryption key that's unique to every POS terminal).
- Retailer says thank you and lets you leave.
- Apple transfers money from their account to the merchant account.
BTW, This is similar to another market Apple has been rumoured to get into. TV. Apple doesn't want to sell people an Apple TV that still has to deal with cable networks and the idea of "channels and bundles". They want to distribute content a-la-carte, just like they do with music. They want to cut out cable companies and distribute content directly themselves.
Apple has no interest is adding a service on top of an existing system run by cronies who are slow to embrace new technology and are stuck in a 20 year old mindset.
Yup, a simple, economical system that's easy to use and implement. Despite that, how many retailers in Vancouver have you seen using them? The Tesla dealership on Robson does, only because it integrates with the iPads all the staff carry around anyway, but other than that... ? I can't say I've ever seen anyone else use it.
Square isn't designed to take on and eliminate the big processors. Why would a store that has Moneris (popular terminal in Canada) also start using Square? There's no advantage to them.
I didn't mention Square to claim they are an alternative to Moneris. I brought them up as an example of a small company that was able to set up their own payment system that's meeting the requirements of banks and credit card companies to offer an alternative to the big payment processors.
This flies in the face of kevlio1980's comments that setting up a new payment system is a Herculean task. It's not, and even less so for someone with the resources of Apple.
Why would a company add another black box to their counter to accept payments from Apple? Lower transaction fees.
First off, I never said NFC was insecure. From the get go I stated that the close-coupling of NFC doesn't make it more secure than other forms of wireless. I was talking about the possibility of sniffing data from NFC vs BT or other wireless technology. All things being equal (the type of data being transferred) there's no difference in security. If there was useful data then it's easier to crack NFC because you can target your sniffer to an exact location to get only the data you need.
As to Apple implementing a payment solution, you completely missed my point. Apple doesn't need to make a system that works with current payment processors - Apple can become their own payment processor. That eliminates the majority of the issues you brought up. This is how I foresee and Apple system working:
- Store provides merchant ID and dollar amount to your iPhone over BT. You authorize the purchase and select payment method (credit, debit or gift card).
- Your device ID along with the merchant ID and amount is encrypted and sent to Apple over LTE/3G. No card numbers or personally identifiable information gets sent to Apple. Simply a request that this device wants to send money to that merchant.
- Apple checks your selected payment method, ensures funds are there and approves the transaction. An encrypted reference number is sent back to your iPhone. At the same time a matching encrypted reference is sent to the Apple POS system in the store over wired Internet.
- Your iPhone sends its reference number to the POS terminal which compares it to the one also sent from Apple (and also to an internal encryption key that's unique to every POS terminal).
- Retailer says thank you and lets you leave.
- Apple transfers money from their account to the merchant account.
BTW, This is similar to another market Apple has been rumoured to get into. TV. Apple doesn't want to sell people an Apple TV that still has to deal with cable networks and the idea of "channels and bundles". They want to distribute content a-la-carte, just like they do with music. They want to cut out cable companies and distribute content directly themselves.
Apple has no interest is adding a service on top of an existing system run by cronies who are slow to embrace new technology and are stuck in a 20 year old mindset.
We'll have to agree to disagree and wait to see what Apple does.
If the originating payment method is still a credit/debit card, then at one level, what you have is a combination of Square and an acquiring bank. You still have the liability questions that arise as you, the consumer, used your credit card. Who takes liability for the transaction? The merchant? Apple? The consumer? This stuff just doesn't go away unless Apple is willing to take on this liability themselves.
If the originating payment method is used to source a new virtual currency which is the primary means of payment via your Apple balance, then you're describing a PayPal competitor. See PayPal's huge challenges in getting any B&M footprint as a warning - merchants are highly resistant to having support a completely second payment channel that is separate from their existing merchant account/acquirer accounting. Now Apple is even on the hook for global fraud management, merchant support, sales, etc. PayPal employs over 10,000 people - I'm not sure Tim Cook would be willing to have Apple split their focus like this.
Again - neither of us know what Apple is doing. I'd love to see Apple come out with a legitimate, global payment network on their own, but with their culture, I don't see them wanting to scale up the thousands of employees needed that can divert their attention from their core competencies.
We'll have to have a friendly wager that hopefully will be answered in a couple months - my horse is a new innovative method that rides on top of the major card companies and lets it ride their existing global merchant acceptance.
That’s not the same, but you know this.
At least you put quotes.
Do you continuously carry your phone in that hand -- or, do you sometimes put that phone in your pocket, purse, satchel, backpack, on the table, on the desk ... ?
Two points:
The watch has to be within >4-8 inches of the phone for NFC to initiate a connection
If the phone is off, the NFC in the watch will use additional power to wake up the phone
As I explained in an earlier post, BLE is a much better solution (faster, greater distance, less power).
Except Apple isn't going to use NFC at all. The focus is clearly on LE Bluetooth.
Then why all the NFC patents? Why spend R&D dollars on a technology that they're not going to use at all?
Because thats how you determine what you're NOT going to do, just as much as what you WILL do.
All the buzz so far would suggest you're right, but making the iP6 unique in its ability to support a NFC payment system would sure be a good way to drive sales of the new device.
Drive sales? Average consumers do not have the vaguest conception of mobile payments, let alone NFC technology. NFC has zero ability to drive any sales of anything. "Mobile Payments" may be able to drive some sales, but powered by Bluetooth or NFC matters none on the surface.
Same reason they did it for the dozens of other features they never used.
Stop making sense.
Do you continuously carry your phone in that hand -- or, do you sometimes put that phone in your pocket, purse, satchel, backpack, on the table, on the desk ... ?
Two points:
The watch has to be within >4-8 inches of the phone for NFC to initiate a connection
If the phone is off, the NFC in the watch will use additional power to wake up the phone
As I explained in an earlier post, BLE is a much better solution (faster, greater distance, less power).
NFC is not happening. It it is old, unsecure, immature, pathetic technology. BLE is lightyears ahead, actually active in development, and already being built in to iOS devices.
802.11ac.
If only the hardware itself was fast enough to truly take advantage of N.
Sure, you run a speediest and get OK speeds on the latest iOS devices. But not what a Mac gets, nor does an app like Safari load web pages anywhere near as fast as a Mac.
Maybe its unrealistic to expect it to be as snappy as a Mac. I still think it should be.
NFC is not happening. It it is old, unsecure, immature, pathetic technology. BLE is lightyears ahead, actually active in development, and already being built in to iOS devices.
Totally.
But.
The credit and debit card companies are pushing it, they want it everywhere. They will eventually get close to that, at least in the US and most of Europe, Japan and Korea are already there.
If Apple wants to go into mobile payment, can they ignore it?
I'm guessing 'no'. Depends on how fast the alternatives can move.
And if it does turn out to be 'no', next year's iPhone will be soon enough, right now it will be mostly useless for almost all iPhone users.
All the buzz so far would suggest you're right, but making the iP6 unique in its ability to support a NFC payment system would sure be a good way to drive sales of the new device.
Drive sales? Average consumers do not have the vaguest conception of mobile payments, let alone NFC technology. NFC has zero ability to drive any sales of anything. "Mobile Payments" may be able to drive some sales, but powered by Bluetooth or NFC matters none on the surface.
True in a conceptual sense, but in real life NFC payment terminals already exist and are in widespread use. BLE terminals are not.
So, it becomes the difference between "Use your iPhone to make payments at any merchant equipped with a touch terminal" or "Make payments at any merchant displaying the iO$ logo." Phrased that way, NFC certainly DOES have more power to generate device sales than a BLE approach.
Besides, the point I was making in that context was that making the iPhone SIX the ONLY iPhone capable of mobile payments, rather than making the feature backwards compatible with older iPhones, would be a way to encourage users of older iPhones to upgrade to the newer model. I should have left it at "mobile payments" and not mentioned NFC specifically. It was tongue-in-cheek anyway.