mobile payments
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Apple Pay could make everyone's mobile wallet purchases cheaper
Have you stopped to consider what impact Apple Pay will have on the credit card industry? Don't worry, we hadn't either, but Bank Innovation believe that the service might just send mobile payments mainstream. Currently, tapping your phone on a reader incurs a transaction fee of 2.75 percent, far higher than the 1.5 percent that's imposed when you swipe a card. Because the issuing bank's card isn't there, there's a greater risk of fraud that banks multinational financial services corporations like Visa and MasterCard then have to shoulder. According to the report, however, the biometric security in the new iPhones might have convinced both institutions that mobile payments aren't a huge risk anymore. The site goes further, to suggest that both will create a "Cardholder Present" transaction fee which either matches the card rate, or is close enough to mean that you won't be pulling out a calculator to work out if it's cheaper to use your phone or card to buy subway tokens. Naturally, both financial institutions have denied that any such discussions are taking place, but hopefully it won't be long before these systems reflect the real world.
Mobile Payments may be a big part of the next iPhone
As we laid out earlier today, it seems that the stars are aligning in such a way as to make Apple's upcoming September event the company's biggest and most impactful event in years. In addition to new iPhones and swirling reports of a new type of wearable device, one rumor that's been picking up steam in recent weeks centers on Apple entering the big bad world of mobile payments. Now the ability to make mobile payments is of course nothing new, but none of the the implementations introduced by a myriad of companies over the years have ever gained mainstream traction. To that end, perhaps Apple will be able to usher mobile payments into the mainstream in the same way that they revived a tablet market that was previously DOA. So without further ado, below are a few pieces of compelling evidence which suggest that a mobile payments announcement from Tim Cook and co. may just a few days away. Earlier this week, Wired reported that Apple's upcoming iPhone will feature a mobile payment system reliant upon NFC functionality. The company's next iPhone will feature its own payment platform, sources familiar with the matter told WIRED. In fact, that platform will be one of the hallmark features of the device when it's unveiled on September 9. We're told the solution will involve NFC. And just yesterday, the well-connected John Gruber not so subtly hinted that mobile payments will be on the agenda come September 9. I've been working on a new joke - about NFC and a new secure enclave where you can store your credit cards, so you can pay for things at brick and mortar retail stores just by taking out your iPhone, but only if it's one of the new iPhones - but no one seems to get my sense of humor. Follow-up joke: It would be cool, and would make a lot of sense, if the new wearable thing had the same magic payment apparatus. The "joke" reference is in regards to Gruber previously stating that Apple would release a wearable device in September, only to claim later on Twitter that it was a "joke." Of course, with Re/Code yesterday reporting that a wearable device will be announced at Apple's upcoming media event, Gruber's "jokes" are worth paying attention to. It's also worth highlighting a July, 2014 report from Amir Efrati of The Information which claimed: Apple has told some partners its [mobile payments] system would involve a so-called secured element in the phones-a piece of hardware where sensitive information such as a phone owner's financial credentials can be stored. The company also aims to run the system without giving up any control to wireless carriers. Some more evidence to consider: Well for starters, Tim Cook hasn't exactly been shy about expressing Apple's interest in mobile payments. During an April 2014 interview with the Wall Street Journal, Cook explained: I think it's a really interesting area. We have almost 800 million iTunes accounts and the majority of those have credit cards behind them. We already have people using Touch ID to buy things across our store, so it's an area of interest to us. And it's an area where nobody has figured it out yet. I realize that there are some companies playing in it, but you still have a wallet in your back pocket and I do too which probably means it hasn't been figured out just yet. And it sure is interesting that Gruber references the secure enclave first introduced with the iPhone's Touch ID feature; You might recall that Tim Cook a few months ago flat-out said that mobile payments was one of the thoughts behind Apple implementing fingerprint authentication on the iPhone in the first place. "The mobile payments area in general is one that we've been intrigued with," Cook explained during an Apple earnings conference call. "It was one of the thoughts behind Touch ID." Now in order for consumers to trust Apple, or any company for that matter, to handle mobile payments, a whole lot of trust is required. And therein lies the beauty of Apple's slow and methodical approach to product innovation. With last year's rollout of Touch ID (and its accompanying secure enclave), Apple was able to demystify a feature that previously resided, almost exclusively, in the purview of science fiction and gadget geeks with a penchant for technical bells and whistles. Now that consumers have had a year to get used to using their unique fingerprints as an access point to the iPhone, the next logical step is to get consumers used to using that same fingerprint (again, safe and sound in the secure enclave) to make mobile payments right from their device. Today, the notion of using one's fingerprint to make mobile payments is a lot less daunting than it was even 9 months ago. There have also been a few alleged leaks of iPhone schematics and logic boards which purport to show the inclusion of an NFC chip. While such leaks are typically great fodder for our Rumor Roundups, they arguably carry more weight than usual given all of the circumstantial evidence cited above. Furthermore, the Financial Times today is reporting that Apple has been working with NXP Semiconductors (a supplier of NFC chips) to help implement a wireless payment system. Note that the Financial Times report was co-authored by Tim Bradshaw who was the first person to break the "Apple is buying Beats" story a few months ago. Apple is working with Dutch chipmaker NXP to add secure short-range wireless technology into the next iPhone, enabling new pay-by-touch capabilities in the latest bid for the smartphone to replace the wallet. Several people familiar with Apple's plans say NXP will provide the secure near-field communications chips that will allow an iPhone to connect with payment terminals or ticketing systems, as well as opening up the possibility for other applications in the "internet of things". Also, Apple has a number of employees with notable experience in the mobile payment space. Some examples include Mehdi Ziat who specializes in, amongst other things, NFC and mobile payments. Prior to joining Apple in March 2012, Ziat worked as an embedded security architect at, surprise surprise, NXP Semiconductors. There's also Raghu Battula who joined Apple as a Senior Software Engineering Manager this past January. Prior to that, Battula spent almost two years as PayPal's Mobile Wallet Engineering Leader. Battula describes his work at PayPal as follows: Lead Mobile Wallet Development teams on iOS, Android and Windows phone platforms. Built revolutionary payment apps used by millions of users across the world. Battula also holds a few patents relating to secure mobile payment transactions. And there are also a smattering of current Apple employees who spent time at companies like American Express working on digital wallet centric projects. And last but not least, Apple a few years back hired Benjamin Viger, an NFC expert with years of deep NFC experience. Near Field Communications World reported at the time: Benjamin Vigier has been working on NFC technology since 2004 and has been responsible for NFC activities at both French mobile network operator Bouygues Telecom and flash memory manufacturer Sandisk. Most recently Vigier was product manager for mobile wallet, payment and NFC at US mobile payments specialist mFoundry. There he conceived and managed both the PayPal Mobile service and Starbucks' barcode-based mobile payments service and was also responsible for the development of mobile wallet applications for two top US mobile network operators and an NFC wallet application for a top three US bank.
Square introduces 'Pickup' for simple online purchases
Since its inception in 2009, that little white payment dongle has snuck into small businesses everywhere, making plastic a less costly proposition for the little guy. Today, it's taking another step toward small business ubiquity with "Pickup," which, fittingly, is a service that enables customers to purchase goods online for pickup in stores at the time of their choosing. The service gives sellers a free online market place and, as with its other products, the barrier to entry is nearly non-existent; the service is free to setup and the fee per purchase is 2.75 percent until July 1st, at which point it will go up to a standard 8 percent. Jack Dorsey's other baby is also enabling offline purchasing via its Register app for those gasp-inducing moments when the internet goes dead; a welcome addition for anyone who's ever had their dreams of an artisan cupcake crushed by faulty WiFi.
The TUAW Daily Update Podcast for April 24, 2014
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get some the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the player at the top of the page. The Daily Update has been moved to a new podcast host in the past few days. Current listeners should delete the old podcast subscription and subscribe to the new feed in the iTunes Store here.
Tim Cook calls mobile payments an "interesting area" in new WSJ interview
In the wake of Apple's stellar earnings report, CEO Tim Cook sat down for a brief interview with the Wall Street Journal. Echoing a sentiment he put forth during the company's earnings conference call, Cook explained Apple's underlying goal is to release the best products as opposed to rushing products to market as quickly as possible. "To do things really well, it takes time," Cook explained. "You can see a lot of products that have been brought to market where the thinking isn't really deep and, as a consequence, these things don't do very well." While Cook of course didn't spill the beans as to any upcoming products or services, he did reference the fact that Apple has nearly 800 million consumer credit cards on file and that mobile payments is an "interesting area." I think it's a really interesting area. We have almost 800 million iTunes accounts and the majority of those have credit cards behind them. We already have people using Touch ID to buy things across our store, so it's an area of interest to us. And it's an area where nobody has figured it out yet. I realize that there are some companies playing in it, but you still have a wallet in your back pocket and I do too which probably means it hasn't been figured out just yet. And lest anyone think that Cook is just casually discussing areas he finds somewhat interesting, note that this isn't the first time Cook has brought up mobile payments. In fact, during Apple's last earnings conference call, Cook flat out said that Apple finds mobile payments "intriguing" and that "it was one of the thoughts behind Touch ID." While no Apple product or service is ever a sure thing until an Apple executive takes the stage and announces it, it's worth highlighting a recent report from Re/Code which claims that Apple in recent weeks has been interviewing experienced executives from the payments industry. The company has been meeting with potential applicants for two new positions at Apple focused exclusively on building a business around the hundreds of millions of credit cards it already has on file. Apple is seeking to fill head of product and head of business development positions... Lastly, Cook had this to say about Apple's upcoming product line: "I feel great about what we've got coming. Really great and it's closer than it's ever been."
Oink helps parents monitor and control their kid's in-app purchases
A 13-year-old with access to his parent's iTunes account can potentially rack up a sizable bill in an afternoon of Candy Crush -- a tab mom might potentially refuse to pay because she didn't authorize the purchase. Payments company Oink has created a solution that lets kids buy what they want, but still stay within mom and dad's budget. With the service, parents can tie a credit card to the account and set limits on exactly where funds in the account can be spent, as well as how much money can be used in a single purchase.
Starbucks app update lets you tip your barista
Starting next week iPhone owners will not only be able to buy your triple-venti-extra-hot-no-foam latte using Starbucks' mobile app, you'll be able to tip your barista for making it as well. The king of coffee is updating its app March 19th to add digital tipping for the first time and make the app easier to navigate. If you're not paying attention in line, a new "Shake to Pay" feature instantly loads your Starbucks card up from anywhere in the app. After you pay, you'll get a push notification encouraging you to drop between 50 cents and two bucks in the store's virtual tip jar. Tips can be adjusted for up to two hours after you leave (in case that macchiato really makes your day), and every purchase is saved in the form of a digital receipt you can access later on.
BlackBerry could turn BBM into a payments platform
BlackBerry's showing off its plans to woo back all of the customers who ditched it during the BB10 transition. In addition to two new handsets, the Canadian outfit is also considering turning BBM into a mobile payments platform in the emerging markets where it still has traction. In a chat with Re/code, enterprise chief John Sims said that BlackBerry is meeting with partners and "exploring the market." It wouldn't be the first time the company has waded into the mobile-money lake either, considering that it teamed up with an Indonesian bank to test BBM-based peer-to-peer fund transfers back in 2012. As long as it'll enable us to split the dinner bill without looking up from our phones, we're up for it.
Square Cash makes bill collecting from your friends less of a hassle
Getting your friends to pay you back for dinner just got a lot easier. Square Cash, the company's super-simple service that lets you pay friends by sending an email, added the ability to request money Thursday. Now you can ask to get paid back by sending an email to your buddy (or reply all to a group of friends) with the amount you need in the subject line and copying request@square.com on the message. When your friends receive the request and tie a debit card to their email, a reply that copies cash@square.com will pay you immediately. If you're waiting for a group to pay you back, you can also track the status of your requested payments, so you know which of your deadbeat friends needs another shake down. Those still waiting to get reimbursed for last weekend's night out can start their own collection service now using an email address, or Square's Android or iOS app.
Square and Uniqlo partner to sell on-demand gifts, save your relationship
Valentine's Day often brings out the last-minute shopper in all of us. Why settle for gas station roses when you could get some finely-tailored Japanese clothing instead? From now through February 17, Uniqlo and Square Market are teaming up to offer Bay-Area lovers on-demand gifts. Shoppers can buy everything from scarves to jackets online, and pick up a wrapped and ready-to-go gift for the love of their life at the store in an hour or less. San Francisco residents already have options like eBay Now and Google Shopping to get items delivered quickly, but neither allow in-person pickups. The Uniqlo partnership is a first attempt at in-person pickups for Square Market, but it's an idea we could see working at a number of different types of retailers all year long. We gave the promotion a try, and were impressed with not only how fast the shopping experience was, but also how fast our purchase was ready. To shop you just need to pick a store location, and browse the available items. When you make a purchase you're given an estimated pickup time, and a text message a few minutes later confirms that time or adjusts it. In our case, our purchase was ready in just 20 minutes. Inside Uniqlo there's a special table for pickup, so you're able to bypass all the lines, and look like the thoughtful lover you want to be, rather than the busy, forgetful one you actually are.
OpenTable launches pilot mobile payment program in San Francisco
Soon you'll be able to use OpenTable to not only book your restaurant reservation, but pay for your meal as well. As rumored last year, the program is currently being tested at new diners and restaurants in San Francisco area, with plans to expand to new eateries and locations in the future. Similar to how PayPal allows you to pay at restaurants by having you check in when you arrive, OpenTable treats your reservation as a check-in of sorts. Paying for your night out with the app involves simply adding a credit card before your eat. When you're done with dessert, you can view your check and complete the transaction on your phone without having to get a bill from your waiter, freeing you up to head on to your next adventure that much faster. With any luck, additional tester tables will open up soon -- the company says it plans to let users request access to the pilot program in the near future.
Tim Cook: Mobile payments was 'one of the thoughts behind Touch ID'
During Apple's earnings conference call yesterday, Tim Cook tipped his hand just a little bit when detailing the decision process underlying Apple's implementation of Touch ID on the iPhone 5s. "The mobile payments area in general is one that we've been intrigued with," Cook explained. "It was one of the thoughts behind Touch ID." While perhaps not the most astounding revelation on its face, it certainly is a step up from Cook's oft-used line that Apple creates products to "delight its customers." Cook's statement therefore provides a rare glimpse into Apple's strategic thinking. Rather than acquiring AuthenTec and implementing fingerprint authorization sensors willy-nilly, we've now learned that Apple has long had its sights on mobile payments. Though truthfully, this shouldn't come as too much of a surprise given the deluge of mobile payment-related patent filings Apple has made in recent years. In light of Cook's statement on mobile payments, it's worth highlighting a recent Wall Street Journal article that provided a few more details regarding Apple's interest in mobile payments. Eddy Cue, Apple's iTunes and App Store chief and a key lieutenant of Chief Executive Tim Cook, has met with industry executives to discuss Apple's interest in handling payments for physical goods and services on its devices, according to people familiar with the situation. In another sign of the company's interest, Apple moved Jennifer Bailey, a longtime executive who was running its online stores, into a new role to build a payment business within the technology giant, three people with knowledge of the move said. Tim Cook also added that mobile payments are "intriguing" and represent a "big opportunity" for the iOS ecosystem. As it stands now, Apple's Touch ID is only functional for unlocking a device and for authorizing purchases via the App Store. Perhaps with the release of iOS 8, that will soon change.
Apple's next cash cow could be your fingerprint
The mobile payments arena may not seem so big right now, but make no mistake: We're just seeing the beginning of a rapidly growing trend. Some estimates we've seen from market research firms put the future mobile payment market in the US alone at around $90 billion spent in 2017. Compared to that, the $12.8 billion spent in 2012 is just pocket change underneath the couch cushions. Apple's very much aware of the revenue potential in this category, and it's taking the possibility seriously. "Mobile payments in general is one [area] that we've been intrigued with, and that was one of the thoughts behind Touch ID." On today's quarterly earnings call, Apple CEO Tim Cook stated that people love to buy content using Touch ID, the fingerprint reader featured on the iPhone 5s. "Mobile payments in general is one [area] that we've been intrigued with, and that was one of the thoughts behind Touch ID," Cook said. "We're not limiting ourselves just to that." This is the first direct confirmation that mobile payments were at least on the table in some form when Apple began developing Touch ID. This wasn't a promise from Cook that anything will happen in the near future, but it seems as though Apple would be leaving a lot of money on the table if it sat on the opportunity.
Square credit card reader loses weight, gains accuracy
The Square credit card reader is already a huge hit with small businesses, so an upgrade to the hardware is definitely cause for a little early holiday celebration. The company revealed an all-new version of its iconic register peripheral today, showing off a sleeker design that cuts its width by 45 percent. The company also boasts that the new reader is more accurate than any previous model. As always, small businesses and anyone else that need an easy way to take mobile payments can score a free card reader by signing up with Square online, but the newest model won't be available in retail stores until 2014. [via Engadget]
Apple is silently telling us to stop asking for near-field communication
We've been hearing rumors about an NFC-enabled iPhone and/or iPad for years now, and the song is always the same: "Sources say the next iDevice will have NFC, and it's about time!" Yet here we sit, with a pair of new iPhones just a day from launch, and no NFC in sight. If there's anything the iPhone 5s and AirDrop should tell us, it's that we should stop expecting an Apple smartphone or tablet with near-field communication, at least for a while. NFC speaks two languages It's important to separate the two primary uses for NFC: Sharing and payments. NFC mobile sharing is useful for everything from virtually handing documents to a coworker, to (apparently) getting naughty videos from your spouse before a business trip. This is an NFC feature that can be used by the widest range of people, and all that is needed is two individuals with compatible devices. NFC payments are quite different -- not in how it works, but in how useful it really is. Finding retailers that accept NFC payments isn't exactly easy. If you don't live in a place like San Francisco or New York City, the ability to use a virtual credit card on your smartphone isn't just a rarity; it's barely even an option. I know this because I live in a midwestern city where people will line up overnight for a new Nexus or Galaxy smartphone, but if you asked a cashier at local store if they accept Google Wallet they'd stare are you like you were from another planet. AirDrop uses Bluetooth and ad-hoc WiFi rather than near-field communication, but it accomplishes the same feat when it comes to mobile sharing. If you have an iPhone 5, 5s, or 5c (or 4th gen iPad, 5th gen iPod, or iPad mini), you can share files with other compatible devices simply by selecting the file and the recipient. It's a no-setup, no-hassle way to send files locally, and you don't need to smash your phones together to make it work. With AirDrop, Apple has duplicated the most useful feature of near-field communication without buckling and including NFC technology in its new devices. Buy why? Apple isn't on board the NFC train, but why? It could be that the technology doesn't seem secure enough to bet on, or that with so few merchants accepting NFC, including it wouldn't actually pay off. In the end, it's almost certainly a mix of many factors, but one angle I don't see mentioned very often is that by adopting near-field communication, Apple might be helping its competitors more than itself. I don't think it's hard to argue that if the new iPhone 5s and 5c included NFC, merchants would have a much greater incentive to invest in the technology. This could benefit Apple, of course, but it would boost long-suffering NFC stalwarts such as Google Wallet (which, ironically, just launched a non-NFC iOS app today) even more. NFC is struggling and growth is slow. By refusing to include it in new devices, Apple is certainly not doing it any favors -- in fact, without an iDevice in its corner, NFC may never break into the mainstream. That's a powerful position for Apple to be in, and one they won't be in a hurry to give up. Will we ever see an NFC-enabled iDevice? It's not entirely out of the question. Apple already has patents on the books that would use near-field communication for sharing, though the systems described work much like AirDrop already does but substitutes Bluetooth for NFC. Regardless, Apple already has everything it needs to wage a long war against near-field communication if it chooses to. With AirDrop handling the local sharing, Passbook acting as a go-between for things such as gift cards and event passes, and a retail scene where NFC is still a non-factor, there's almost no reason to even consider it.
OpenTable for iPhone to begin testing mobile payments
OpenTable is already the most popular restaurant-reservation system in the world, and now the company is planning a new twist -- mobile payments for your meals from its namesake app (free). Matthew Roberts, chief executive of OpenTable, told the New York Times' Brian X. Chen that the payment process will be straightforward and is currently in testing. Once a meal is completed, a diner would open the app, review the check, add a tip and then approve the payment. For restaurants, the mobile payment service would be a boon, as it provides another reason for diners to use the app and come to the restaurant. OpenTable won't take a cut of the transaction, although they already charge restaurants for reservations made through the service in addition to an equipment service charge. The company's pilot program is being tested in 20 restaurants, and there are some kinks to work out. For example, paying with an app means that a diner may just get up and leave, in which case the waiter might think the diner is skipping the check. OpenTable is looking at ways to notify the restaurant workers so they don't go chasing diners out of a building.
Dash wants you to pay your happy hour tab with your iPhone
Alternative payment methods seem to be all the rage these days, from retailer-specific virtual cards that can be loaded with currency to the movement to make NFC-based payment kiosks an option at retailers. As VentureBeat reports, New York's Dash wants to do things a bit differently and by targeting eateries and bars, it may have a good chance to carve out its own niche. The Dash app for iPhone allows patrons of participating bars and restaurants to view, split and pay their tabs without ever reaching for a purse or wallet. The system has the added benefit of keeping you from having to wave down a waiter or waitress when you're ready to hit the road -- but food service workers don't have to worry about missing a tip, as Dash has a built-in feature for that as well. It's a novel idea, but since getting restaurants nationwide to jump on board isn't easy, Dash is starting with New York City, where the company claims it already has over 50 bars and food joints on its list. Dash is slated to hit the App Store in August, and if things go well, the company is ready to expand to cities such as Los Angeles, San Francisco, Chicago and Miami.
Square Stand turns your iPad into a cash register, on pre-order for $299
Square just announced a new product meant to replace traditional point-of-service systems: the aptly named Square Stand. The hardware turns an iPad (2 or 3; support for the Lightning connector is coming later this year) into an all-in-one POS with an integrated card reader that accepts cash, plastic and Square Wallet payments. Available for pre-order today, the stand will set business owners back a rather steep $299, but the sleek design has a decidedly smaller footprint than the cash registers of yore, and it offers merchants real-time analytics for tracking sales via the Square Register app. Of course, if you want the full retail setup, you'll still have to spring for Square's receipt printer, barcode scanner and cash drawer. Though the Square Stand won't be available until July 8th, several merchants throughout the country, including Cafe Grumpy in New York City and Morelli's Ice Cream in Atlanta, will be operating the device starting tomorrow. And given Square's partnership with Starbucks, we wouldn't be surprised if the system soon shows up at the coffee chain as well.
PayPal's new Android SDK offers multiple in-app payment options
PayPal just announced a new Android SDK for developers. Previously released for iOS, the kit lets app devs integrate mobile payments via both PayPal and credit card. As the mockup above demonstrates, it's very straightforward -- and we're pretty sure that's the point. The SDK will support Android 2.2 (Froyo) and up when it becomes available to US developers on May 15th.
Walmart extends iPhone scan-and-checkout feature
Walmart is expanding its Scan & Go checkout feature to over 200 stores, up from the current 70, according to Reuters. Scan & Go allows Walmart shoppers to scan items in the store with the Walmart iPhone app and then pay for them at self-checkout terminals. The pilot program began in Arkansas stores in September 2012. According to Retuers, new markets that will feature Scan & Go inlcude Denver, Colo.; Phoenix, Ariz.; Omaha, Neb.; Dallas and Austin, Texas; Oklahoma City and Tulsa, Okla.; Wyoming; Bozeman, Mont.; Seattle, Wash.; San Jose, Calif.; and Portland, Ore. It's important to note that Scan & Go does not allow a user to pay for items through the iPhone app. From the Reuter's report: "Shoppers scan bar codes on items they want to buy, using the Walmart app on their iPhone, iPod touch or iPad to keep track of the planned purchases and the total cost. Then they pay at a self-checkout screen, bypassing the typical registers." The Walmart app is a free download.
