MasterCard is enjoying the Apple, Google and others that want to ease payment while having a security level that is acceptable. The company has in partnership with Zwipe, a company that focuses on biometric tech, built a charge plate with a built-in fingerprint sensor and NFC, for trial purposes. The Zwipe MasterCard is said to be extremely secure, as example all data is stored directly on the card, rather than on an outside database.
Comment: I really believe that we will see more contactless cards and in more regions. Purpose is a simpler and faster payment for lower amounts (today amounts up to £20/€20$20). Security is that higher amounts need a PIN (or chip and PIN) and that every fifth purchase independant af value need to be with chip and PIN. I think this is ok, but wonder if the Zwipe MasterCard will ever be in production. Yet another card with higher cost and that need another update on merchant side including new certification.
I still believe that we will have chip and PIN cards, contactless cards and of course mobile virtual cards that will follow already existing standard payment schemes and without the need for new hw/sw and business agreements at merchant side.
Below is a summary of the launch yesterday.
Apple Pay mobile payment
- iTunes account with Visa or MasterCard or Amex card on file and issued by issuing banks with an agreement with Apple; American Express, Bank of America, Capital One Bank, Chase, Citi and Wells Fargo at availability with additional banks coming quickly thereafter including Barclaycard, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank.
- iPhone with NFC, embedded Secure Element, Touch ID (eg. iPhone 6, 6+ and Watch)
- POS enabled for contactless payment (eg. Mastercard PayPass, Visa payWave, Amex ExpressPay)
- No new agreement
- Fee is normal swipe card fee
- No liability change (Issuer liability)
Integration of cards to Apple’s system
- No charge for users, merchants or developers for transactions
- Agreement with each individual bank and cut of transaction to Apple
Where and when
- From October via a free upgrade of iOS 8 to iPhone 6 and 6+
- 220 000 locations with contactless payments enabled
- Other countries will come
How it works
Instead of using the PAN (card number), a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your iPhone or Apple Watch. Each transaction is authorized with a one-time unique number using your Device Account Number and instead of using the security code from the back of your card, Apple Pay creates a dynamic security code to securely validate each transaction.
- In-shop, chose card in the passbook wallet, press Tounch ID and tap mobile at the NFC enabled payment terminal.
- Online shopping in apps with iPhone with the touch of a finger. At checkout chose Apple Pay, authenticate and signing of transaction via Touch ID.
Article from Business News Daily on 26 payment options with mobile solutions.
Read it here
More and more articles indicates that Apple will do a NFC launch or maybe a statement at the version 6 launch event on September 9.
Macrumors article here
And the NFC antenna could be hidden under the TouchID sensor, see how here
Comment. If Apple have succed in getting agreements with Visa, Mastercard and American Express and with same (or lower) fees and with no liability shift for merchants…then this is what is needed to see real customer adoption of mobile payments.
An article that says that the next $100B startup will come from heating up mobile commerce arena. The article also sums up the already crowded space and with a US focus.
Read article in Techcrunch here
In an interview in Fortune with Amex CEO Ken Chenault he states that it will be five platforms that matters in the future of payments; Apple, Amazon, Facebook, Google, and Alibaba. Of course American Express will be embedded in each of these.
Read interview here.
Comment: I believe local/regional platforms beside “the big 5″ will take/have a great part in future payments. Also interesting is the Amex founding that $25 trillion spent out there is outside credit/debit cards, most on peer-to-peer payments. Hard as of today for Amex to take part in this, eg. interchange fee challenge..
I’ve said before in this blog that I don’t believe that Apple will launch NFC in iPhone…but I’m starting to change my mind. This after the last weeks signals and rumours and this time from sources that I believe in, like Wall Street Journal, Finextra, AppleInsider, TechCrunch and now last from the normally initiated KGI securities analyst, Ming Chi-Kuo.
If right we will in the September launch find NFC in two new models of iPhone’s, both with larger screens , and intwo models of a new gadget, the iWatch.
This move if/when happening will be interesting in many ways
- Consumers would be able to use their iTunes accounts to pay in shop with “a tap” (and PIN if high amount = more than $20/€20/£20/200SEK).
- Interchange fee? Card not present fee (card is on file) and liability? What’s needed on the merchant side, new agreement, sw upgrade of POS/cash register systems? Cards is in the back of the iTunes account so card companies “will not worry that much”, they will get the transactions in any case.
- Will/how will Apple handle vendors of mobile wallet solutions? Allow other wallets to enable iTunes payments?
- Many new POS’s is WE/Asia/US is already hardware ready, just need to be enabled.
..consumers will embrase this move, will be interesting to see how offline merchants react..
Anyway, when it happens it will be good news for the mobile payment and mobile financial services industry.