updated 07:00 pm EDT, Wed July 23, 2014
May build on iBeacons, Passbook, Touch ID and partners to create truly seamless, secure system
A new report is claiming that Apple is accelerating its plans for a grand "digital wallet" mobile payments system, which could even be ready to debut in the same time frame as the expected "iPhone 6." The company is said to be in talks with Visa to create a partnership agreement that would allow consumers to pay for goods and services using only their iPhone, leveraging the "secure enclave" portion of the A7 chip and Touch ID to create what would be expected to be a seamless mobile payment system.
Examples of iBeacon functionality
Apple's entry into the field, particularly in a partnership with a major credit and debit card company, would be both disruptive and traditional for the iPhone maker. While sometimes on the cutting edge of technologies, Apple generally prefers to take its time creating a consumer-friendly unified solution built on already-existing technology that was just implemented unimaginatively by competitors, as it has done with all-in-one computers, music players, smartphones and tablets, among other things.
Many of the pieces of the technology are already in place, but lack a truly seamless experience that would foster more widespread consumer adoption. Companies like Google have tried -- and largely failed -- to bring electronic payments to merchants on a wide scale, first with NFC technology and then by upgrading "wallet" software packages to be more flexible. Both Google and PayPal have seen some success with the latter, but mainstream use and acceptance has been elusive.
In contrast to NFC, Apple appears to have settled on a combination of Wi-Fi and Bluetooth Low Energy as a better combination for secure transactions, though the company does also peripherally support NFC for compatibility reasons in its iBeacon technology and could add it to a future iPhone. The company's iBeacons, which have seen widespread adoption, could become a key component of Apple's plan to bring merchants on board. The company recently also debuted a somewhat-awkward iTunes Pass feature that allows customers to refill their iTunes account by visiting an Apple Store. It is seen by many as more of a "proof of concept" disguised field test rather than a genuine attempt to replace iTunes Gift Cards or tying a credit card to an iTunes account.
Implemented on a larger scale -- where consumers could refill their digital wallets at nearly any merchant every time they buy something using the system -- the mobile payment system could result in buyers leaving their traditional wallets at home, at least as far as carrying multiple credit and debit cards around with them. The functionality of Passbook and other e-wallets to store loyalty cards is just a step away from storing virtual credit cards -- but consumers need to feel that the security system is strong and well in place before they would trust it with financial details. Utilizing Touch ID's secure enclave which keeps authorization data stored locally and not transmitted anywhere could be the "missing link" needed to foster adoption, reports The Information.