Words by:
Wayne Baxter
Ok, that’s a completely bold title that will clearly start the wrong kinds of conversation, however hopefully this article will at least question certain things and [hopefully] nod in some kind of agreement. This article is NOT here as a review of Apple’s new iPhone 5s (you can find the review here if you’re interested); it’s not there to tell you how fantastic it is, how great the camera is, how things just work etc etc… it’s here for us to explore a bit more into their new Touch ID system.
For those who may not be aware, Touch ID is Apple’s fancy new way of saying ‘fingerprint scanner’. As a tool, it’s really impressive, and intuitive. I like how third-party apps can’t gain access to the Touch ID data; I love how easy it is to unlock the phone and purchase content from the various Apple stores.
But then all this touch tech got me thinking….
Just over a year ago, in July 2012, Apple purchased AuthenTec for $356 million. They were the pioneers of mobile security technology, and for Apple essentially, they had the capabilities, knowledge and skills to make Touch ID a reality.
However, regardless of the $bn’s Apple retain in cash stock-piles, the $356 million is still a huge sum of money, particularly for a feature that the public really aren’t hugely bothered by. Let’s face it, Apple would have still sold the same amount of stock on launch if they replaced the Touch ID sensor with a higher-resolution camera. So why invest in this technology?
It’s been almost five years since ‘contactless’ payments, along with NFC, became available in the UK – the method of touching your debit card against a reader without having to put any formal identification in. Whether you advocate this or not (we do!), it’s changed the way people shop, whilst the worry of security has yet to come into it.
However, whilst other mobile handset manufacturers have been quick at getting NFC (near-field communication) into their own devices, Apple have stayed firm and this feature hasn’t been included in their current range of handsets (or tablets). This, however is where they currently sit in terms of sharing data:
1. Pass information between iDevices? Yes = AirDrop
2. Pass data onto third party vendors? Sort of – in parts with Passbook.
3. Mobile payments? Unless you consider elements of Passbook, then no.
Mobile payments are becoming more a way of daily life, especially for those ‘capital city-workers’. With Visa already having access to Android’s NFC devices, owners of various Samsung / HTC devices don’t have to think twice about using their handset to pay for goods. However where does this leave Apple, a firm who seem to resist NFC technology?
Well they haven’t resisted the technology, they’ve just built their own… kinda. With Touch ID.
We believe that Apple’s Touch ID is the start of a new mobile payment ecosystem, designed to rival not only contactless payments, but generally create the need for, in life, to have just one login for all your personal information. Your Apple ID.
A majority of App Store/iTunes users already have their Apple ID linked to their bank accounts. Now, iPhone 5S users who use Touch ID now have their finger print linked to Apple ID. We believe it’s not long before Apple start delivering Touch ID payment systems to merchants. In recent tests, the technology has shown itself to be impressively secure, and whilst there’s little doubt regarding the convenience of NFC payments, there’s still the wonderment regarding the ‘what if I lost my wallet’? I can’t remember the last time I actually took cash into a Starbucks, instead opting to use my Starbucks Passbook facility for sheer convenience (as well as loyalty points). However there’s that ONE drawback of still having to log online to increase my balance when it gets low. Passbook is easy, sure, but it’s not without that hindrance.
Obviously what we’re mentioning here is purely speculative, and not based on ANY facts or anything that, well we believe anyhow, already exists in the public domain. However considering Apple’s huge investment into the technology, there’s very little reason why the tech should be just suited to mobile devices.
“But Apple have no experience in the payment market” we hear you cry…. Well, let’s turn the clock over the past 10 years or so:
2003 – Apple enter the music merchants market [with iTunes] with no prior experience in this arena. They not only succeed but end up creating an entirely new category.
2007 – Apple enter the mobile phone marketplace with no prior experience in this arena. Microsoft COO Steve Bullmer famously said “$500, fully subsidized, with a plan! That is the most expensive phone in the world and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine.”. Apple’s creation of an entirely new form of smartphone changed the industry and the iPhone is still the biggest-selling single smartphone on the market.
2010 – Apple enter the tablet race with the iPad, with no previous Tablet experience. No need to say what happened there.
Now, whilst they may have no immediate entry into the payment system, we mustn’t forget, that Apple, as a technology company, still have the knowledge and expertise to build some of the best products on the market. Additionally, Apple’s products are fairly straightforward in terms of usage-ability ; their ‘out-the-box’ appeal has definitely aided mass success.
Additionally, in the UK at least, fraudulent instore transactions cost 0.07% (ie for every £100, 7p is fraudulent). Whilst that number may seen low, in all retail spending in 2012, £341m was fraudulently spent (in the UK alone).
Having finger-tip purchasing would not only boost speed and convenience for the consumer, but for merchants, the opportunity of risk of fraud decreases dramatically.
We’ll have to wait and see what comes from this, and whether Apple indeed make it into a reality, however one thing’s for sure, Touch ID is here to stay.
