The launch of Apple Pay on Monday has brought
considerable publicity to a technology that’s already
embedded in millions of Android smartphones yet has so far
failed to take off.
Clunky implementations, lack of widespread acceptance
and poor user knowledge have hampered NFC technology,
but some in the payments industry are hoping Apple Pay
has an impact far beyond iPhone 6 users.
“I think without a doubt, Apple has a unique place in the
mobile ecosystem, with hardware, software and services,”
said James Anderson, senior vice president of emerging
payments at MasterCard. He said Apple’s adoption is an
endorsement of NFC and gives consumers the feeling that
the technology is safe and ready to be used.
“We’re very excited,” he said.
In theory, NFC payment systems only require a user to
place an NFC-enabled payment card or phone near a
reader for a payment to be made. But in reality, a numeric
code or password is usually required for security, reducing
the convenience factor.
An 'elegant experience'
Apple’s system is different. It users the fingerprint sensor
in the iPhone, so no code or password is required.
“I think what Apple has done is create a very elegant
experience around [NFC payments],” said Sam Shrauger,
senior vice president of digital solutions at Visa. “That,
combined with the number of Apple users, will be pretty
catalytic for NFC payment.”
He demonstrated Apple Pay at an event on Monday in San
Francisco, where he used an iPhone 6 to make a payment.
The phone was automatically woken from sleep by the
terminal, and payment was made without Shrauger having
to do anything other than hold his thumb on the fingerprint
sensor.
“It’s an extremely pleasing user experience,” said
MasterCard’s Anderson, who said he has been using it for a
couple of months.
The user experience has always been key to success for
Apple. After all, many of Apple’s biggest hits haven’t come
from being first to a market but from Apple doing a better
job at something. The iPod, iPhone and iPad weren’t the
first of their kind, but they did end up proving to be the
systems to beat.
So, if Apple Pay takes off, the pressure will be on
competitors to come up with NFC systems that are equally
easy to use.
Apple could also push other systems to become more
secure and offer better privacy.
Payment tokens hamper breaches
Perhaps the biggest innovation with Apple Pay is
something happening behind the scenes. Instead of
exchanging your card number with a retailer, the system
sends a payment token as a substitute. That means a
hacked payment terminal, like those used in recent
breaches at Target and Home Depot, wouldn’t be able to
grab your card number.
Google uses a more basic system that substitutes a card
number for a virtual MasterCard that is used for the
transaction. It’s not as secure as the token-based system
used by Apple, and Anderson said he expects Google to
adopt the newer tokenization technology.
There’s also a fairly big privacy gap between Apple and
Google. Apple doesn’t see all of the transactions being
made with Apple Pay, but Google does see what its Google
Wallet users are buying and where those transactions are
taking place. So success for Apple Pay could push Google
to give its users a bit more privacy.
considerable publicity to a technology that’s already
embedded in millions of Android smartphones yet has so far
failed to take off.
Clunky implementations, lack of widespread acceptance
and poor user knowledge have hampered NFC technology,
but some in the payments industry are hoping Apple Pay
has an impact far beyond iPhone 6 users.
“I think without a doubt, Apple has a unique place in the
mobile ecosystem, with hardware, software and services,”
said James Anderson, senior vice president of emerging
payments at MasterCard. He said Apple’s adoption is an
endorsement of NFC and gives consumers the feeling that
the technology is safe and ready to be used.
“We’re very excited,” he said.
In theory, NFC payment systems only require a user to
place an NFC-enabled payment card or phone near a
reader for a payment to be made. But in reality, a numeric
code or password is usually required for security, reducing
the convenience factor.
An 'elegant experience'
Apple’s system is different. It users the fingerprint sensor
in the iPhone, so no code or password is required.
“I think what Apple has done is create a very elegant
experience around [NFC payments],” said Sam Shrauger,
senior vice president of digital solutions at Visa. “That,
combined with the number of Apple users, will be pretty
catalytic for NFC payment.”
He demonstrated Apple Pay at an event on Monday in San
Francisco, where he used an iPhone 6 to make a payment.
The phone was automatically woken from sleep by the
terminal, and payment was made without Shrauger having
to do anything other than hold his thumb on the fingerprint
sensor.
“It’s an extremely pleasing user experience,” said
MasterCard’s Anderson, who said he has been using it for a
couple of months.
The user experience has always been key to success for
Apple. After all, many of Apple’s biggest hits haven’t come
from being first to a market but from Apple doing a better
job at something. The iPod, iPhone and iPad weren’t the
first of their kind, but they did end up proving to be the
systems to beat.
So, if Apple Pay takes off, the pressure will be on
competitors to come up with NFC systems that are equally
easy to use.
Apple could also push other systems to become more
secure and offer better privacy.
Payment tokens hamper breaches
Perhaps the biggest innovation with Apple Pay is
something happening behind the scenes. Instead of
exchanging your card number with a retailer, the system
sends a payment token as a substitute. That means a
hacked payment terminal, like those used in recent
breaches at Target and Home Depot, wouldn’t be able to
grab your card number.
Google uses a more basic system that substitutes a card
number for a virtual MasterCard that is used for the
transaction. It’s not as secure as the token-based system
used by Apple, and Anderson said he expects Google to
adopt the newer tokenization technology.
There’s also a fairly big privacy gap between Apple and
Google. Apple doesn’t see all of the transactions being
made with Apple Pay, but Google does see what its Google
Wallet users are buying and where those transactions are
taking place. So success for Apple Pay could push Google
to give its users a bit more privacy.
No comments:
Post a Comment