Apple Makes NFC ‘Cool’ Again
We all saw this coming. Apple needed to get on board with mobile payments and they have in a big way. Apple introduced “Apple Pay” making NFC cool again.
What does this mean exactly?
Apple Pay will allow the user to pay using contactless payment technology known as Near Field Communication (NFC). Android smartphones have had NFC enabled devices for quite some time now, while Apple waited patiently.
In order to authorize the payment for iPhone 6 and iPhone 6 Plus, the user will place their finger on the TouchID portion of the device while placing the device near a transaction reader and, without even having to turn the screen on, validate a payment. Apple has taken over the mobile wallet. Third party wallet solutions from banks etc are essentially Android only now.
With the Apple Watch, the user will double tap a button on the side of the watch and place the face of the watch near the transaction reader. Simple:
The ability to pay within an application works much the same by using the TouchID for secure authorization.
Inputting a new card into the system is as easy as taking a quick photograph of the card so you do not have to deal with showing the retailer your information any longer. The transaction uses Secure Element to ensure the data is secure on the device.
Apple claims the device nor the merchant ever receive your PAN. This means there is a level of tokenization. A unique Device Account Number is created for every card for security reasons, which ensures no personal information is available to anyone but the hardware itself.
In-Store Experience
Google bet on Host Card Emulation (HCE) which is the virtual representation of a smart card using only software, which allows retailers/merchants to offer payment solutions more easily through mobile means. Apple Pay will use NFC and Secure Element. Apple’s solution will squeeze out the mobile wallet solution from the banks, Softcard (formerly ISIS) and others.
In-App Experience
In-store purchases are just one step. Apple Pay also makes purchases for physical goods and services easier to accept. Deep integration with payment processors makes the solution very simple and easy to setup. This will be the game changer for retailers and restaurants.
Payment providers make processing payments with Apple Pay simple by managing the credentials and/or processing of purchases from your app. Apple Pay works with:
With over 220,000 retailers accepting contactless payments, Apple Pay seems to be ready for the spotlight without much hassle. Even though it is limited to iPhone 6, iPhone 6 Plus and the Apple Watch, Apple Pay may become something everyone jumps on, even though it may not be immediate.
