As was fully expected (although the details were kept under wraps) yesterday Apple unveiled its anticipated next-generation iPhone, iPhone 6, which was – as also expected – accompanied by a bigger model (iPhone 6 Plus) But that was not all: it also offered us the Apple Watch, and a new payment service it hopes will replace the wallet (Apple Pay), utilizing NFC support added with the new iPhones. Finally!
I am sure that readers of this blog will be more than aware of the specs for both phones so I won’t go into details of that here. The important thing for us was a) NFC b) Apple Pay and c) the Apple Watch can also act as a mobile payment device in conjunction with the iPhone 6.
The Apple Pay process will incorporate a Near Field Communication antenna across the top of the phone, as well as the TouchID fingerprint scanner, a secure element in the phone handset and an NFC sensor at the point of sale, said Apple vice president Eddy Cue. Paying with Apple Pay via the Touch ID sensor built into the handset is a smart move – it reaffirms the idea of security into a seemingly simple transaction. The Apple Watch will also have NFC and enable payments. We were also told that the secure element that will store all the payment card data and Apple has worked with MasterCard, Visa, American Express, Capital One, and other banks, as well as 220,000 retailers. Consumers will be able to use the credit card associated with their iTunes account or add another card by taking a picture of it with the iPhone’s camera. At the moment the focus is very much on the US but Apple have assured us that they want to cover most of the world as soon as possible. We may be very lucky here in Europe and not have to wait so long.
Steve Perry, Chief Digital Officer at Visa Europe, said, “Apple’s entry to the market represents a critical piece of the mobile payments jigsaw. This is a pivotal moment for digital payments and one that demonstrates the momentum behind mobile and contactless services. Visa Europe has led the rollout of NFC payments ever since we launched the first contactless cards and terminals in 2007. Today there are more than 1.5 million Visa contactless terminals in stores across Europe – all ready to take mobile payments. Apple’s decision to enter the market reflects the scale of opportunity that exists in digital payments today. Its support will drive awareness and usage of contactless services around the world – we anticipate a “halo effect” that will benefit all players in the mobile payments ecosystem. We are working closely with Apple and with our member banks to bring this new service to market in Europe.”
Apple Pay is built into the latest iPhone handsets but won’t be available until a software update for U.S. users in October. The new Apple Watch, available in early 2015, will also include NFC and the ability to make payments. To pay with Apple Watch, a user will double-click the button under the Digital Crown and hold their wrist up to the contactless reader. Consumers will hear and feel a confirmation from Apple Watch once the payment information is sent.
Apple were very keen to expand on how secure Apple Pay really was. “We’ve integrated security throughout both the hardware and software in a way that only Apple can so when you add a new credit card, we don’t store the credit card number, we don’t give it to the merchant,” said Apple’s senior vice president of Internet Software and Services, Eddy Cue. “We create a device-only account number and we store it safely in the secure element and each time you pay, we use a one-time payment number along with a dynamic security code so you no longer have the static code on the back of your plastic card and if your iPhone is lost or stolen, you can use Find my iPhone and suspend all of the payments from that device and again, because the credit card isn’t stored on the device, there’s no need to cancel your credit card. Now, security is at the core of Apple Pay, but so is privacy. We are not in the business of collecting your data. So, when you go to a physical location and use Apple Pay, Apple doesn’t know what you bought, where you bought it, or how much you paid for it. The transaction is between you, the merchant and your bank. It’s fast, it’s secure and it’s private”.
Cue said stores that will immediately accept Apple Pay include Macy’s, Bloomingdale’s, Walgreens, Duane Reade, Staples, Subway, McDonald’s, Whole Foods and, of course, Apple retail stores.
Well known commentators in the NFC sphere were suitably impressed by Apple Pay who said that this new payment product along with the released Apple Watch was about far more than payments. “While Apple Pay will make use of mobile payments more palatable and interesting to many more people, the really interesting thing about what the new iPhone’s NFC capabilities will bring is everything else the technology could provide beyond just payments. In particular, as we’ve seen through dozens of deployments of NFC payments and proximity marketing enablement for our customers like Barclaycard, Softcard – formerly ISIS – and media network owners like Clear Channel, location-based marketing and real-time engagement opportunities are made far more powerful,” commented Neil Garner, CEO and Founder, Proxama.
“The Apple Watch should provide an instantaneous experience that is essential inside the store whether for getting information on a product, checking in, paying, registering a loyalty card, or receiving offers. Supporting such use cases with a watch will gain better consumer adoption. It is much easier to react to a beacon pushed message and information looking at your watch than taking your phone out of pocket or purse, unlocking it and clicking on the alert in the notification area.”
Others were a tad more cautious over some of the finer details that were not expanded upon. Rupert Englander, Managing Director of Wooshping had this to say, “Naturally I am delighted that Apple has finally embraced NFC and the future of mobile payments seems assured. However I am concerned by the lack of information being offered by Apple on other equally as important aspects of NFC implementation such as pairing, sharing and engagement. For NFC to continue to gain traction and buy-in the iOS system must support these other use cases or consumer will once again continue to be confused by what they can and cannot do. I have visions of iPhone 6 users waving their phones furiously against a Talking Statue and nothing happening. That would not be great.”
”So yes I am delighted that Apple has embraced NFC but remain cautious until we see further evidence of a full and open implementation.”