EDITORIAL: Glitches and cooperations

error 53This editorial was first released on Monday 15th February. Contactless Intelligence Weekly News Review Editorial – Week 07, 2016:

Last week saw a certain amount of gleeful Schadenfreude coming from various members of the tech community aimed at Apple and their iPhone offering – as news reports surfaced of problems and glitches with Apple Pay and something else – known as Error 53 (or as it will probably soon be known as ‘Error53gate’), that has an impact on the use of Apple’s Touch ID solution and in some cases the iPhone in general.

Relatively few people outside the tech world are aware of the so-called “Error 53” problem. The issue appears to affect handsets where the home button, which has Touch ID fingerprint recognition built-in, has been repaired by a “non-official” company or individual. The problem only occurs when the latest version of Apple’s iPhone software, iOS 9, is installed. In fact, the phone may have been working perfectly for weeks or months since a repair or being damaged. However, after installation a growing number of people have reported that their phone simply stops working. In mobile parlance – it just becomes ‘bricked’ – that is, as useful as a brick.

Apple defended this move by saying that Error 53 was there to protect customer security and issued a statement. “We take customer security very seriously and Error 53 is the result of security checks designed to protect our customers. iOS checks that the Touch ID sensor in your iPhone or iPad correctly matches your device’s other components. If iOS finds a mismatch, the check fails and Touch ID, including for Apple Pay use, is disabled. This security measure is necessary to protect your device and prevent a fraudulent Touch ID sensor from being used. If a customer encounters Error 53, we encourage them to contact Apple Support.”

If that wasn’t enough, later in the week 9to5Mac reported a glitch within Apple’s mobile wallet prevented users from setting it up — at least as far as Visa cards were concerned. Other cards, American Express, MasterCard or Discover cards, were not affected. Apple acknowledged that the Visa-linking issue affected “some users” of Apple Pay and a detailed timeline on Apple’s system status page appears to confirm the roughly seven-hour period during which the problem existed.

After 9to5Mac posted its initial report on the Apple Pay issues related to linking Visa cards, the site later updated it to include mention that Apple had made it known that the outage had been resolved. As is irritatingly standard operating procedure for Apple, no further news regarding the number of Apple Pay users who were affected by the glitch, nor as to the technical specifics that might have caused it, were disclosed.

Apple has recently released a security update that includes fixes for more than 100 flaws in the operating system, including a vulnerability in Apple Pay that can allow for hackers to steal the confidential information of their victims.The security issue would have allowed hackers to trace the recent transactions that users made through Apple’s mobile payment system. All the information regarding the transactions could be obtained by hackers through the log feature of the platform.

To add further insult to injury, research from First Annapolis Consulting revealed that only a fifth of iPhone 6 owners in the US (20%) have used Apple Pay at least once, down from 22% in spring last year. 15% say they use it regularly — more than once per month — down from 19% in the 2015 survey. “Awareness among iPhone 6 users is down slightly from 88% in our spring 2015 survey,” says Hugh Gallagher, a principal at First Annapolis. “High awareness is a necessary but not sufficient condition for the success of a new payment service such as Apple Pay. At this point in time, the typical financial institution can expect 1 to 2% of cardholders to use Apple Pay two or more times, based on the survey results. While early adoption of Apple Pay may not be as high as expected and appears to have plateaued since the initial launch in October 2014, usage is likely to continue to increase with the proliferation of other mobile payment solutions which should expand the merchant acceptance base and broaden the availability and visibility of mobile payments in general.”

On a more positive note and speaking of other mobile payment solutions, last week saw Vodafone announcing a strategic partnership with PayPal to expand contactless payments across its mobile wallet. The partnership will enable PayPal customers to link their accounts to the Vodafone Wallet, allowing them to use Android smartphones to make contactless payments. According to PayPal’s European CEO, this marks the first time PayPal users will be able to make contactless payments. “Money is going digital, and the smartphone is at the centre of this transformation. Our partnership with Vodafone will enable millions of our customers in Europe to make contactless payments for the first time in their favourite high street stores using their mobile phones,” said Rupert Keeley, CEO of PayPal Europe.

The agreement will enable millions of PayPal customers in Europe to opt to use the Vodafone Wallet to pay for goods and services at the point-of-sale using their phones with a Vodafone NFC SIM, currently supported by more than 70 Android smartphone models. PayPal customers in several European countries will be able to choose to add their accounts to the Vodafone Wallet during 2016. Vodafone customers who do not have a PayPal account will be able to sign up for one from within the Vodafone Wallet app.

Stefano Parisse, Group Director Consumer Services, Vodafone Group said, “We are excited to allow millions of PayPal customers to make payments at the physical point-of-sale using their Vodafone Wallet, which provides highly secure mobile payments. Vodafone customers will now enjoy the ability to use PayPal to fund payments made using the Vodafone Wallet, which is the industry’s most comprehensive solution for offline and online payments.”

Vodafone Wallet launched in November 2013 and is currently available in Germany, Spain, the UK, Italy and the Netherlands. It was announced in March 2015 that customers in five major European markets would be able to use their Visa cards to make NFC mobile payments with a SIM-based service that makes use of tokenization, while support for MasterCard was added in November 2015.

With Mobile Wold Congress just a few weeks away, expect further mobile strategic partnerships to be announced soon. The Contactless Intelligence team will also be in Barcelona, so if you have any exciting news, make sure you let us know. For those of you who want to know more about innovate payment solutions and the trends in the world of standardisation and Mobile ID, we recommend you book your ticket to the upcoming Contactless Intelligence Conference & Forums (April 26-27, London) as soon as possible while prices are low.

UPDATE 20.02.2016: Apple has now released an update to iOS 9 that will restore devices left disabled by Error 53. “For anyone who experienced Error 53, Apple has released an update to iOS 9.2.1 to allow you to successfully restore your device using iTunes on your Mac or PC,” Apple says. “If Touch ID on your device didn’t work before you saw Error 53, the feature still won’t work after you restore your device.”

Steve Atkins
Contactless Intelligence

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Categories: Editorial

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