I think the 'smart endpoint' will be a fundamental shift in how credit accounts are handled. The physical card is silly, and the intermediate PoS devices are suspect too. Building an end to end solution where each party (buyer, seller, bank) only know what they need to know solves the fundamental issue of too much data passed
I buy a coffee
PoS device says "$4.28 plus what ever tip you want"
I tap my phone, it receives 'Seller XXXX [an encrypted token for their bank account encrypted by their bank's public key and retailers private key] wants 4.28 (4.00+tax)... do you want to pay and how much?"
I click add 15% to subtotal and 'purchase' with my touch ID
which unlocks my account number, which I then encrypt in my private key
Phone sends my bank "Pay Seller XXXX $4.68" encrypted in my banks [or apple's] public key
(all of this is tokenized, checksummed, serialized and tokenized
that the worst thing that can happen is replay of exactly the same
transaction being rejected due to serialization issues)
Transaction goes to PoS device (can't read it), off to the internet to Apple/myBank
My Bank decrypts it, and decrypts my account with my public key
verifies my limits and (if denied, sends a note back to ME saying "sorry, can't pay them")
sends retailers bank (or proxy) a verifiction [do you know retailer XXXX?] [again encrypted in bank to bank PKI
They say yes, bank queues up a transfer and sends me [my public key, bank's private key[ and the Retailer[in retailers public key,] Approved.
Transactions clear on my device and PoS
- Starbucks never knows who I am or what my account is... they just know my bank told their bank 'you'll get the money'
'Loyalty' cards, may obviate that... I know 'who you are' but that's separate from the PAN information from your Credit Account
- Banks don't know the other bank's client's accounts perse, just that real time, each can say, what you sent me was valid.
I drink expensive dirty water, and the barista may get their .60 at the end of their shift.
Even online/offline purchases work for this, by my phone and my bank generating 1 time transaction accounts that are pre-authed for only that transaction amount and that seller at that particular time.
Getting rid of the physical, human readable card is a big deal. Tokenizing the transaction beginning at the Seller and not the PoS device (it's all in the clear in RAM before tokenization... right Target?)
This gets to the crux of information security.... It's not the computers, the networks, or the people... 'it's the DATA, stupid!' The earlier in the transaction you can secure the 'secret' (account number... all the rest is purely authentication data... exp date, name, phone , zip code, CVV CVV2). Using this sort of model, Other than the endpoint setup (where risk of intercept is greatest), your account number should never be known by anyone other than you and your bank.) Then it's just 'authorizing' (who is allowed to use this data), and that's where TouchID (and account setup) narrows it down as well (only these devices, and persons who are registered to use the secure enclave verified by biometrics on those devices are allowed to transact with this account).
The obvious risk is covert takeover of the endpoint. That's where Apple's risk is, and why, I think, you'll never see a 'multi-user' iOS device.
This is pretty much how I do my Google Wallet now. This new Apple NFC thing is great for everyone.
I'm still not sure about what regarding this rumored payment processing system equates to lock in, but I understand what you meant about iOS lock in.
Apple's just rumored to provide a credit card proxy. It's not a credit issuer, nor a bank. And issuers can (and probably will) still send you a physical credit card, not that it's any more secure, not in the US anyway. But nothing about that locks you in to Apple "iWallet" (or whatever) any more than anything about Amazon Prime locking you into Amazon. There's maybe a convenience or economic incentive to stay, but nothing to prevent you from leaving.
You're correct with this. The iPhone will/should have NFC. So now Google can use that for their Google Wallet which will work just the same. This is how I'm going to do it when I get the new iPhone. No lock in for me at all. I can use any device I want at any time and it will all be seamless.
This clown has no idea what Apple will do with payments in the future. If Paypal can net billions of dollars a year with only 100 million accounts imagine how much Apple can with 800 million accounts.
PayPay is estimated to have $3B in net revenue for 2014 and $1.8B in Gross profit.
Apple can easily multiply that by 6x that amount once the payment system is mature.
We are talking $18B in revenue and $8B in profit. That's more profit than what the iPad produces.
Visa/Amex/Mastercard/Discover have total revenues of $60B a year
They have total profits of almost $20B a year
You dont think Apple can take a huge chunk of that?
No I don't.
Paypal and the CC companies actually do something to earn their keep, otherwise people would not use them. What is Apple going to do that warrants anyone giving them money in exchange?
The CC companies and Paypal don't need Apple. They are not going to forego billions in income and hand it over to Apple just because Apple are offering a different conduit for transactions.
It occurs to me that we all are overlooking something ...
We're discussing the [I] technical aspects [/I] of [I] buying things [/I] and, specifically [I] paying for [/I] our purchases ...
There is another perspective that could prove more rewarding to customers, merchants, credit providers and Apple, alike ...
The [B][I] social * [/I][/B] aspect of shopping and buying.
What if, while shopping, the [I] shopping customer [/I] realizes that the items at hand would be of interest to friend(s) -- whether the [I] shopping customer [/I] is interested or not. The friend(s) could be elsewhere -- in the same store, the same mall or at home. What does the [I] shopping customer [/I] do?
Well, I asked my 18-year-old granddaughter that question -- she loves to shop/buy.
She said: "I'd tell my friend(s)"
I asked: "How -- text, iMessage, Twitter, Instagram, etc. (none of which I use).
She said: "I'd probably send a message with a picture using SnapChat."
Mmm ... What if the merchant facilitated this process -- generating a blank SnapChat message containing: Pictures, Prices, Specialss, etc. -- through iBeacons? Select friend(s) from your contacts, create the message text and send!
Do you think that the consumers, merchants, cc companies and Apple would be interested in that? Boots in the Store?
I remember seeing Apple drawings (patents?) from at least 8 years ago (pre-iPhone) showing a shopper communicating with friends in the same store, mall or at home -- though it wasn't clear [I] how [/I] they communicated.
* the social aspect of shopping
I worked for IBM Distribution Development (Software development for wholesalers, retailers -- everything from big box stores to department stores to fashion to fast foods to supermarkets to Mom & Pops.
One wised old veteran of [I] Distribution [/I] once told me: "Never underestimate the [I] social [/I] aspect of shopping!" His best example was the women who go to supermarkets to shop and [I] socialize [/I] with friends [I] their own age [/I] -- getting away from the kids. Savvy supermarkets exploited this by providing play areas to occupy the kids while the women shopped and attempted to recover a modicum of their sanity and self-respect.
Then there are the two gabbers -- talking, while walking down the aisles at CostCo -- side-by-side, leaning on their shopping carts -- oblivious to everything around them ... Might as well be driving two Zambonis bound at the hip.
Then there was my bachelor friend who went to the supermarket to meet single women ... under the guise of shopping ... (I suspect that many of the single women were doing the same thing).
Finally, there are those [I] testimonials [/I] telling who'll ever listen -- the benefits of buying a set of Ginsu knives (whatever) on the TV shopping networks.
[B][I]"Never underestimate the [COLOR=blue][I] social [/I][/COLOR] aspect of shopping!" [/I][/B]
[B][I]Rather, find a way to [COLOR=blue] exploit [/COLOR] it![/I][/B]
Paypal and the CC companies actually do something to earn their keep, otherwise people would not use them. What is Apple going to do that warrants anyone giving them money in exchange?
The CC companies and Paypal don't need Apple. They are not going to forego billions in income and hand it over to Apple just because Apple are offering a different conduit for transactions.
CC companies share fees with Square, why? Because Square offers a great service to business owners. Why is Apple any different if they provide a service that users prefer? Besides, Apple can offer what others can't; safer transactions due to TouchID.
CC companies share fees with Square, why? Because Square offers a great service to business owners. Why is Apple any different if they provide a service that users prefer? Besides, Apple can offer what others can't; safer transactions due to TouchID.
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
What I meant (perhaps not clearly) is that Square charges 2.75%, of which something like 70-80% funnels back to the CC companies. Apple could essentially be the same. There isn't an additional fee from the consumer standpoint. For the convenience/security of a TouchID payment, Apple would retain x amount and funnel the rest back to the CC companies.
How is it more secure than a PIN? Simple. The card is stored on the phone itself in the secure enclave, and only accessible via TouchID. You don't need a physical card nor a PIN.
Apple will not be a bank but might well buy one. That way the bank gets regulated but Apple does not.
The important thing to remember is that banking is not Apple's business, and the banking business can be treacherous (you can ask GE about that). Apple would probably prefer not to do banking, but will do it if it's the only way to get where they want to be.
With regard to Apple getting a better deal but accepting part of the risk - my guess is that Apple would insist on this. Not because it wants to take on risk, but it know that the risk is slight because the system is secure. On the other hand, Samsung's "system" is not. Samsung will certainly try to do a similar deal and will have to accept the risk, or no deal. That could be expensive, very expensive. And that is precisely Apple's plan here -- you have copied our look-and-feel, well now put your money where your mouth is.
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
The reports I have seen suggest three things:
1. the fee is lower - merchants will love that
2. Apple gets to keep a piece of that fee, and assumes some of the fraud risk
3. card-present and not-present (i.e. on-line) transactions have the same fee, not different (as happens today)
Merchants in the U.S. do not check signatures (when I recently used my U.S. card in England and Germany - it worked OK and the merchants checked every time). And so there's fraud but the fee is enough to cover it (and we all pay, in the end). But with TouchID fraud becomes almost impossible. And secure-enclave-enabled end-to-end secure transactions mean that the POS-scraping stuff (i.e. Target, maybe Home Depot) become impossible. The local store and even the head office processing system never get data than can enable later fraudulent transactions.
So I see what the banks and card issuers like this -- but where is the benefit for users? I guess we'll have to wait until Tuesday to know that part.
In order to do these digital payments you will need an iOS device with NFC.
if you already have an iPhone then all you need is the iWatch.
If you don't have an iPhone, then you need to buy the iPhone 6 with NFC.
You lost all credibility with the very first sentence of your post. You clearly have a lack of imagination if you think the only way to do mobile payments is via NFC.
NFC is certainly one technology that could be used to facilitate a mobile payment system, but I can think of a couple other systems off the top of my head - and I'm confident that Apple can think of even more!
Whatever it is that Apple announces next week in terms of their mobile payment system, it will certainly *not* require an NFC chip!
Apple doesn't release new features on a whim - especially one of this magnitude. This feature has been in design/development for well over a year and if there were even the slightest chance that it would require NFC to work - last year's iPhone 5S and 5C would 100% for sure have included an NFC chip. They didn't! So this mobile payment system is going to be different - possible based on some variant of iBeacon technology, Bluetooth low-energy or something completely different! But definitely not NFC!
I think one exciting twist to Apple's mobile payment system would be the incorporation of the new "Family Sharing" feature! Imagine being able to help out your teen by letting then carry a digital copy of your credit card with them - that they could use as if it were there own - but with every purchase they make being presented on the head of the families device for authorization! This would be the ultimate in convenience and flexibility - and they've already built-in this exact capability for purchases made via an iTunes account!
I don't know if you heard it here first - but you sure as hell have heard it here! LOL. Whatever it ends up being, Tuesday is going to be an exciting day!!!
You lost all credibility with the very first sentence of your post. You clearly have a lack of imagination if you think the only way to do mobile payments is via NFC.
NFC is certainly one technology that could be used to facilitate a mobile payment system, but I can think of a couple other systems off the top of my head - and I'm confident that Apple can think of even more!
Whatever it is that Apple announces next week in terms of their mobile payment system, it will certainly *not* require an NFC chip!
Apple doesn't release new features on a whim - especially one of this magnitude. This feature has been in design/development for well over a year and if there were even the slightest chance that it would require NFC to work - last year's iPhone 5S and 5C would 100% for sure have included an NFC chip. They didn't! So this mobile payment system is going to be different - possible based on some variant of iBeacon technology, Bluetooth low-energy or something completely different! But definitely not NFC!
I think one exciting twist to Apple's mobile payment system would be the incorporation of the new "Family Sharing" feature! Imagine being able to help out your teen by letting then carry a digital copy of your credit card with them - that they could use as if it were there own - but with every purchase they make being presented on the head of the families device for authorization! This would be the ultimate in convenience and flexibility - and they've already built-in this exact capability for purchases made via an iTunes account!
I don't know if you heard it here first - but you sure as hell have heard it here! LOL. Whatever it ends up being, Tuesday is going to be an exciting day!!!
It will require NFC for the tap and pay. I'll bet you anything with this.
It will require NFC for the tap and pay. I'll bet you anything with this.
Oh! Did they announce "Tap and Pay"?
I thought the announcement was for a "Mobile Payment Solution".
Or are you just so far inside the box that you don't even realize that you're in a box at all? Mobile Payments does not necessarily mean "Tap and Pay". That may be the way it works today, but there's no reason to believe that will be the way it works tomorrow! If anyone can take the "tap" out of "Tap and Pay", Apple can.
I envision one possible solution where your bill gets transmitted directly to your phone over Bluetooth and your phone picks it up because its the only one in range and automatically displays it - even on the lock screen. If the amount is below a certain threshold, the payment just goes through. If it's above the threshold, you may be prompted to authenticate the purchase using your thumbprint or a PIN code. It it's a tipped purchase, it may prompt you to enter the tip amount!
I stand by my prediction that NFC will not be a part of Apple's Mobile Payment Solution.
Comments
I think the 'smart endpoint' will be a fundamental shift in how credit accounts are handled. The physical card is silly, and the intermediate PoS devices are suspect too. Building an end to end solution where each party (buyer, seller, bank) only know what they need to know solves the fundamental issue of too much data passed
I buy a coffee
PoS device says "$4.28 plus what ever tip you want"
I tap my phone, it receives 'Seller XXXX [an encrypted token for their bank account encrypted by their bank's public key and retailers private key] wants 4.28 (4.00+tax)... do you want to pay and how much?"
I click add 15% to subtotal and 'purchase' with my touch ID
which unlocks my account number, which I then encrypt in my private key
Phone sends my bank "Pay Seller XXXX $4.68" encrypted in my banks [or apple's] public key
(all of this is tokenized, checksummed, serialized and tokenized
that the worst thing that can happen is replay of exactly the same
transaction being rejected due to serialization issues)
Transaction goes to PoS device (can't read it), off to the internet to Apple/myBank
My Bank decrypts it, and decrypts my account with my public key
verifies my limits and (if denied, sends a note back to ME saying "sorry, can't pay them")
sends retailers bank (or proxy) a verifiction [do you know retailer XXXX?] [again encrypted in bank to bank PKI
They say yes, bank queues up a transfer and sends me [my public key, bank's private key[ and the Retailer[in retailers public key,] Approved.
Transactions clear on my device and PoS
- Starbucks never knows who I am or what my account is... they just know my bank told their bank 'you'll get the money'
'Loyalty' cards, may obviate that... I know 'who you are' but that's separate from the PAN information from your Credit Account
- Banks don't know the other bank's client's accounts perse, just that real time, each can say, what you sent me was valid.
I drink expensive dirty water, and the barista may get their .60 at the end of their shift.
Even online/offline purchases work for this, by my phone and my bank generating 1 time transaction accounts that are pre-authed for only that transaction amount and that seller at that particular time.
Getting rid of the physical, human readable card is a big deal. Tokenizing the transaction beginning at the Seller and not the PoS device (it's all in the clear in RAM before tokenization... right Target?)
This gets to the crux of information security.... It's not the computers, the networks, or the people... 'it's the DATA, stupid!' The earlier in the transaction you can secure the 'secret' (account number... all the rest is purely authentication data... exp date, name, phone , zip code, CVV CVV2). Using this sort of model, Other than the endpoint setup (where risk of intercept is greatest), your account number should never be known by anyone other than you and your bank.) Then it's just 'authorizing' (who is allowed to use this data), and that's where TouchID (and account setup) narrows it down as well (only these devices, and persons who are registered to use the secure enclave verified by biometrics on those devices are allowed to transact with this account).
The obvious risk is covert takeover of the endpoint. That's where Apple's risk is, and why, I think, you'll never see a 'multi-user' iOS device.
This is pretty much how I do my Google Wallet now. This new Apple NFC thing is great for everyone.
In order to do these digital payments you will need an iOS device with NFC.
if you already have an iPhone then all you need is the iWatch.
If you don't have an iPhone, then you need to buy the iPhone 6 with NFC.
IWatch will not work with Android, it is all about selling more iOS devices.
Apple's goal is to keep adding to the iOS value proposition to justify the higher price.
Many Android users will switch to the iPhone so they can also use the iWatch for payments, health tracking and security.
Apple's competitors have NFC payment systems but they have not caught on because they only understand how to add features.
They don't understand how to create end to end seamless experiences that delight consumers.
My friend was recently telling me how he can't wait to switch back to an iPhone after switching to an HTC one.
He said it was a good device but there were constant little annoyances that made him miss his iPhone.
NFC will work with any device. Regardless of OS. NFC is a standard. I use it everyday already from my phone.
I'm still not sure about what regarding this rumored payment processing system equates to lock in, but I understand what you meant about iOS lock in.
Apple's just rumored to provide a credit card proxy. It's not a credit issuer, nor a bank. And issuers can (and probably will) still send you a physical credit card, not that it's any more secure, not in the US anyway. But nothing about that locks you in to Apple "iWallet" (or whatever) any more than anything about Amazon Prime locking you into Amazon. There's maybe a convenience or economic incentive to stay, but nothing to prevent you from leaving.
You're correct with this. The iPhone will/should have NFC. So now Google can use that for their Google Wallet which will work just the same. This is how I'm going to do it when I get the new iPhone. No lock in for me at all. I can use any device I want at any time and it will all be seamless.
Here's a picture of the new iWatch:
... 'Splain to me just how that would work
Wooden it be nice?
This clown has no idea what Apple will do with payments in the future. If Paypal can net billions of dollars a year with only 100 million accounts imagine how much Apple can with 800 million accounts.
PayPay is estimated to have $3B in net revenue for 2014 and $1.8B in Gross profit.
Apple can easily multiply that by 6x that amount once the payment system is mature.
We are talking $18B in revenue and $8B in profit. That's more profit than what the iPad produces.
Visa/Amex/Mastercard/Discover have total revenues of $60B a year
They have total profits of almost $20B a year
You dont think Apple can take a huge chunk of that?
No I don't.
Paypal and the CC companies actually do something to earn their keep, otherwise people would not use them. What is Apple going to do that warrants anyone giving them money in exchange?
The CC companies and Paypal don't need Apple. They are not going to forego billions in income and hand it over to Apple just because Apple are offering a different conduit for transactions.
We're discussing the [I] technical aspects [/I] of [I] buying things [/I] and, specifically [I] paying for [/I] our purchases ...
There is another perspective that could prove more rewarding to customers, merchants, credit providers and Apple, alike ...
The [B][I] social * [/I][/B] aspect of shopping and buying.
What if, while shopping, the [I] shopping customer [/I] realizes that the items at hand would be of interest to friend(s) -- whether the [I] shopping customer [/I] is interested or not. The friend(s) could be elsewhere -- in the same store, the same mall or at home. What does the [I] shopping customer [/I] do?
Well, I asked my 18-year-old granddaughter that question -- she loves to shop/buy.
She said: "I'd tell my friend(s)"
I asked: "How -- text, iMessage, Twitter, Instagram, etc. (none of which I use).
She said: "I'd probably send a message with a picture using SnapChat."
Mmm ... What if the merchant facilitated this process -- generating a blank SnapChat message containing: Pictures, Prices, Specialss, etc. -- through iBeacons? Select friend(s) from your contacts, create the message text and send!
Do you think that the consumers, merchants, cc companies and Apple would be interested in that? Boots in the Store?
I remember seeing Apple drawings (patents?) from at least 8 years ago (pre-iPhone) showing a shopper communicating with friends in the same store, mall or at home -- though it wasn't clear [I] how [/I] they communicated.
* the social aspect of shopping
I worked for IBM Distribution Development (Software development for wholesalers, retailers -- everything from big box stores to department stores to fashion to fast foods to supermarkets to Mom & Pops.
One wised old veteran of [I] Distribution [/I] once told me: "Never underestimate the [I] social [/I] aspect of shopping!" His best example was the women who go to supermarkets to shop and [I] socialize [/I] with friends [I] their own age [/I] -- getting away from the kids. Savvy supermarkets exploited this by providing play areas to occupy the kids while the women shopped and attempted to recover a modicum of their sanity and self-respect.
Then there are the two gabbers -- talking, while walking down the aisles at CostCo -- side-by-side, leaning on their shopping carts -- oblivious to everything around them ... Might as well be driving two Zambonis bound at the hip.
Then there was my bachelor friend who went to the supermarket to meet single women ... under the guise of shopping ... (I suspect that many of the single women were doing the same thing).
Finally, there are those [I] testimonials [/I] telling who'll ever listen -- the benefits of buying a set of Ginsu knives (whatever) on the TV shopping networks.
[B][I]"Never underestimate the [COLOR=blue][I] social [/I][/COLOR] aspect of shopping!" [/I][/B]
[B][I]Rather, find a way to [COLOR=blue] exploit [/COLOR] it![/I][/B]
No I don't.
Paypal and the CC companies actually do something to earn their keep, otherwise people would not use them. What is Apple going to do that warrants anyone giving them money in exchange?
The CC companies and Paypal don't need Apple. They are not going to forego billions in income and hand it over to Apple just because Apple are offering a different conduit for transactions.
CC companies share fees with Square, why? Because Square offers a great service to business owners. Why is Apple any different if they provide a service that users prefer? Besides, Apple can offer what others can't; safer transactions due to TouchID.
[VIDEO]
CC companies share fees with Square, why? Because Square offers a great service to business owners. Why is Apple any different if they provide a service that users prefer? Besides, Apple can offer what others can't; safer transactions due to TouchID.
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
http://www.cardfellow.com/blog/square-review-rates-fees/#RatesFees
What I meant (perhaps not clearly) is that Square charges 2.75%, of which something like 70-80% funnels back to the CC companies. Apple could essentially be the same. There isn't an additional fee from the consumer standpoint. For the convenience/security of a TouchID payment, Apple would retain x amount and funnel the rest back to the CC companies.
How is it more secure than a PIN? Simple. The card is stored on the phone itself in the secure enclave, and only accessible via TouchID. You don't need a physical card nor a PIN.
... a strategy that wouldn't make Apple much money, but would help lock users into the company's iPhone ecosystem.
Lock in? Maybe. Maybe not. One person's "lock in" is another person's godsend.
Either way, there will be huge benefits for iPhone ecosystem users: convenience and security.
Sign me up.
Oh, and in case anybody has forgotten, Apple has worked long and hard on adding value to their hardware.
iTunes, iWork, iCloud, and umpteen other ecosystem features all add enormous value.
An "iWallet" strategy would add significant value to that already massive ecosystem.
Apple will not be a bank but might well buy one. That way the bank gets regulated but Apple does not.
The important thing to remember is that banking is not Apple's business, and the banking business can be treacherous (you can ask GE about that). Apple would probably prefer not to do banking, but will do it if it's the only way to get where they want to be.
With regard to Apple getting a better deal but accepting part of the risk - my guess is that Apple would insist on this. Not because it wants to take on risk, but it know that the risk is slight because the system is secure. On the other hand, Samsung's "system" is not. Samsung will certainly try to do a similar deal and will have to accept the risk, or no deal. That could be expensive, very expensive. And that is precisely Apple's plan here -- you have copied our look-and-feel, well now put your money where your mouth is.
http://finance.yahoo.com/news/chinas-biggest-carriers-might-revealed-152104528.html
The CC companies share their fees? Could you provide a link for that because me reading of it is that they charge a fee on top of what the CC companies do.
Apple is different because the are not offering anything to the merchants - who pay the fees. They aren't offering anything to the consumer either except a minor convenience. If Apple were to try charging a fee to iPhone users for each payment they made, I think they would switch back to just handing their card over.
How much greater security is touch ID to entering a PIN? It has been years since I had to sign and have my signature compared to the one on the card. I don't see touch ID being meaningfully more secure than that process either.
The reports I have seen suggest three things:
1. the fee is lower - merchants will love that
2. Apple gets to keep a piece of that fee, and assumes some of the fraud risk
3. card-present and not-present (i.e. on-line) transactions have the same fee, not different (as happens today)
Merchants in the U.S. do not check signatures (when I recently used my U.S. card in England and Germany - it worked OK and the merchants checked every time). And so there's fraud but the fee is enough to cover it (and we all pay, in the end). But with TouchID fraud becomes almost impossible. And secure-enclave-enabled end-to-end secure transactions mean that the POS-scraping stuff (i.e. Target, maybe Home Depot) become impossible. The local store and even the head office processing system never get data than can enable later fraudulent transactions.
So I see what the banks and card issuers like this -- but where is the benefit for users? I guess we'll have to wait until Tuesday to know that part.
Edit: add link <http://bankinnovation.net/2014/09/apple-said-to-negotiate-deep-payments-discounts-from-big-banks/>;
This is the iPhone 6 (official from China Telecom) :
Apple will probably be more than a little unhappy about this.
You lost all credibility with the very first sentence of your post. You clearly have a lack of imagination if you think the only way to do mobile payments is via NFC.
NFC is certainly one technology that could be used to facilitate a mobile payment system, but I can think of a couple other systems off the top of my head - and I'm confident that Apple can think of even more!
Whatever it is that Apple announces next week in terms of their mobile payment system, it will certainly *not* require an NFC chip!
Apple doesn't release new features on a whim - especially one of this magnitude. This feature has been in design/development for well over a year and if there were even the slightest chance that it would require NFC to work - last year's iPhone 5S and 5C would 100% for sure have included an NFC chip. They didn't! So this mobile payment system is going to be different - possible based on some variant of iBeacon technology, Bluetooth low-energy or something completely different! But definitely not NFC!
I think one exciting twist to Apple's mobile payment system would be the incorporation of the new "Family Sharing" feature! Imagine being able to help out your teen by letting then carry a digital copy of your credit card with them - that they could use as if it were there own - but with every purchase they make being presented on the head of the families device for authorization! This would be the ultimate in convenience and flexibility - and they've already built-in this exact capability for purchases made via an iTunes account!
I don't know if you heard it here first - but you sure as hell have heard it here! LOL. Whatever it ends up being, Tuesday is going to be an exciting day!!!
It will require NFC for the tap and pay. I'll bet you anything with this.
It will require NFC for the tap and pay. I'll bet you anything with this.
Oh! Did they announce "Tap and Pay"?
I thought the announcement was for a "Mobile Payment Solution".
Or are you just so far inside the box that you don't even realize that you're in a box at all? Mobile Payments does not necessarily mean "Tap and Pay". That may be the way it works today, but there's no reason to believe that will be the way it works tomorrow! If anyone can take the "tap" out of "Tap and Pay", Apple can.
I envision one possible solution where your bill gets transmitted directly to your phone over Bluetooth and your phone picks it up because its the only one in range and automatically displays it - even on the lock screen. If the amount is below a certain threshold, the payment just goes through. If it's above the threshold, you may be prompted to authenticate the purchase using your thumbprint or a PIN code. It it's a tipped purchase, it may prompt you to enter the tip amount!
I stand by my prediction that NFC will not be a part of Apple's Mobile Payment Solution.