Commentary

Apple Touch ID/iBeacon Destined To Power M-Payments

After all of the hype and shallow coolness, Apple’s Touch ID feature on the iPhone 5s has not proven to be my friend. Maybe I suffer from Muted Fingerprint Syndrome. But no matter how many times I re-enter my fingerprint with iOS 7, I suffer more false starts when opening my phone now than I did when I started using the feature over a month ago.

And soon I may be fumbling at checkout to get my iPhone to acknowledge me. In an enormous patent filing Apple submitted to the World Property Organization last week, it lays out its model for using a Touch ID-like model in combination with wireless check-in (i.e. iBeacon) for making the phone into a payment device. Not being one to rifle through 600-page patent docs, I will leave it to the folks at Apple Insider to describe. “The patent predicts a mobile, location-based payments system authenticated by a user's fingerprint,” writes Shane Cole. “A user is shown checking into a coffee house and authorizing a payment to that same business with their fingerprint, a feature many believe is in the works with Apple's iBeacon's microlocation technology as a complementary piece.”

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Apart from the fingerprint authentication, the model is not new. PayPal has already deployed its own Bluetooth LE devices in some retail location tests. For users who have opted into the service and a specific store app, the device pings you at the door to allow a check-in. From there the merchant can see you are there and can charge your purchases easily to the PayPal account. 

Surely no one thought that Apple invested millions in fingerprint recognition technology just so it could make passcodes easier. And those iBeacons are not just there to push more product info to your phone when you enter the lingerie section. As some of us argued months ago when Apple rolled out each of these pieces, there is clearly a master plan underway to get Apple much deeper into retail and the payments business. After all, these folks have hundreds of millions of our credit cards in the database. Tim Cook and co. would be guilty of corporate malfeasance if they didn’t figure out a way to leverage that financial connection and consumer trust offline. And whether real or imagined, I imagine a fingerprint ID model will feel a lot more secure and private to many consumers than would that magic NFC tap.  

Interestingly, the massive patent filing also describes a much broader range of Touch ID functions that might be coming. The sensor may become embedded in the touchscreen itself. The ID button could be used as a controller/trackpad, where different positioning activated gestures like screen swipes. The ID can also be used to activate different user profiles on the same device and limit certain users from specific app access. A shared iPad, for instance, could use Touch ID to restrict the banking app to specific users.

Which is great if I just could get Touch ID to recognize the iPhone’s owner. Maybe I just have too light a touch. It may be genetic. I have heard it said about the men in my family. “You could barely tell he was holding my hand,” Grandma used to say about Grandpa.

4 comments about "Apple Touch ID/iBeacon Destined To Power M-Payments".
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  1. mike boland from BIA/Kelsey, November 27, 2013 at 1:57 p.m.

    Great article as always Steve. The master plan you allude to will look something like this -- http://www.businessinsider.com/apple-point-of-sale-2012-11#ixzz2Lm2O8ZCi.

    It will build from itunes and all the billing relationships already in place, as you suggest. Since i wrote the above article, i'm even more convinced of this direction, as iBeacon makes the indoor connectivity more reliable and touchID makes the payments more secure.

    The latter is what everyone always forgets to talk about in the media orgy over mobile payments. The realistic user adoption is still gated by lots of comfort level issues and the fact that the process of swiping my credit card... ain't broke.

    Security, comfort and a compelling enough use case to get me to change that entrenched habit are what's needed. So far everything out there is cool, but doesn't hit the above marks for me, not to mention mainstream users, my parents, etc.

    Some version of what Apple is going for with physical world payments via itunes could finally unlock all this. The "compelling enough use case" could be Apple eliminating the need to stand in checkout aisles for example, and instead have roving transactions throughout the store (... like what Apple has pioneered in its own stores).

    All the signs are there.

  2. Steve Smith from Mediapost, November 27, 2013 at 2:08 p.m.

    Thanks Mike. I agree. I think the compelling use case may come not in wallet functions so much as in augmented shopping experiences. If the in-store interactions with products is enhanced by the user's mobile device (product info/reviews, is it in my size and color?) then the retailer already has that user on the digital track. Make it easier for them to seal the deal (circumvent waiting for a salesperson, having the right size brought from the back) and there is a reason for the consumer to complete the process on the device rather than engaging with salespeople. I recall that an early self-checkout service in mobile years ago had great success just by promoting mobile self-checkout on the long holiday checkout line. Forget the damned mobile wallet silliness. I have to do too much calculation to decided if that is easier than my credit card. But if you can get me off this damned line now - show me the app.

  3. mike boland from BIA/Kelsey, November 27, 2013 at 2:20 p.m.

    Totally true regarding opportunity to engage high-intent shoppers with better product info on the spot. Specs, reviews, and real time inventory data (if the shelf is empty, are there more units at the store down the street?). Retailigence is doing some cool stuff with real time POS inventory data to be embedded in retailer or third party shopping apps. That's going to be a big area of growth in the next year. That sku-level data also moves towards a related concept of maximizing retailer revenue with variable "demand pricing" governed by mobile signals (proximity, buying history, etc.). Airfare pricing on steroids - http://blog.biakelsey.com/index.php/2013/11/26/variable-pricing-for-local-commerce-take-2/. Might be a while, but we'll see it happen.

  4. Paula Lynn from Who Else Unlimited, November 27, 2013 at 4:33 p.m.

    All of this stuff was designed for the sellers B2B2B benefit, not the shoppers. But they are doing a bang up job convincing you to lose yourself.

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