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Apple Said To Team With Visa, MasterCard On iPhone Wallet 187

Posted by samzenpus
from the pay-your-way dept.
An anonymous reader writes with news about a possible partnership between Apple and major credit card companies. Apple plans to turn its next iPhone into a mobile wallet through a partnership with major payment networks, banks and retailers, according a person familiar with the situation. The agreement includes Visa, MasterCard, and American Express and will be unveiled on Sept. 9 along with the next iPhone, said the person, who asked not to be identified because the talks are private. The new iPhone will make mobile payment easier by including a near-field communication chip for the first time, the person said. That advancement along with Touch ID, a fingerprint recognition reader that debuted on the most recent iPhone, will allow consumers to securely pay for items in a store with the touch of a finger.
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Apple Said To Team With Visa, MasterCard On iPhone Wallet

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  • by Anonymous Coward on Monday September 01, 2014 @01:13AM (#47798445)

    This will be good because it might finally get businesses serious about exception NFC transactions. As long as it's not some proprietary bullshit on Apple's end, of course.

    • by Isomorphic (241771) on Monday September 01, 2014 @01:37AM (#47798501)

      This is not really a surprising move from Apple. It was more or less a given once they rolled out TouchID.

      On the flip side, I've been listening to various Internet commentators go on and on about how Apple "has to have NFC" (reason: "because Android does"). Meanwhile, I've had an RFID credit card for approximately five years now, and, despite attempting to use it at numerous terminals marked with the RFID symbols, have only been successful in using it less than five times. Apparently no one running a retail payment terminal cares.

      Even if you are a hater, you have to admit Apple's entry into this market will help spur businesses to roll out NFC terminals, or switch on NFC on their existing terminals, or just make sure the NFC works.

      • by AmiMoJo (196126) * <[ten.3dlrow] [ta] [ojom]> on Monday September 01, 2014 @02:43AM (#47798671) Homepage

        I use NFC for payment every day without issue. It's a mature, reliable technology, at least in most places. I think where there have been issues it's usually due to retailers insisting on using certain companies with new tech, instead of established ones.

        The real problem is the lack of standards. Japan has e-wallets, there is Google Wallet and now it looks like there will be a third and incompatible Apple wallet. What are the chances that other payment providers will be allowed to use NFC on Apple hardware for their own systems? Could you ditch the Apple wallet and install Google Wallet instead?

        • by swillden (191260) <shawn-ds@willden.org> on Monday September 01, 2014 @10:50AM (#47800425) Homepage Journal

          The real problem is the lack of standards. Japan has e-wallets, there is Google Wallet and now it looks like there will be a third and incompatible Apple wallet.

          There are standards. Japan is its own world, but the Google Wallet and ISIS (a consortium of mobile network operators and banks who created the ISIS wallet -- yes they're looking for a new name) relies on standard EMV payment protocols -- slightly modified by the US Visa, MC, AMEX and Discover organizations, but not incompatibly so. Apple will follow the EMV standards as well, or they'll get nowhere, because retailers are a slow-moving, cost-conscious group.

          Visa and MasterCard announced two years ago that they'll implement the "liability shift" the end of 2015, which means that from 2016 onward 100% of fraud will be charged to whichever entity in the chain (merchant, merchant acquirer, clearing house, issuer) does not have the EMV smart chip technology implemented. Since merchants get stuck with 98% of fraud, and other links in the chain are moving slowly, this will provide a huge incentive for merchants to install EMV-capable point of sale terminals. That doesn't require them to deploy NFC-capable terminals, but they will, and many of them are.

          Not even Apple is capable of creating an entirely new payment ecosystem. They'll play ball with the banks and card associations, or they'll go nowhere.

          • by mjwx (966435)

            Not even Apple is capable of creating an entirely new payment ecosystem. They'll play ball with the banks and card associations, or they'll go nowhere.

            So what you're saying is that Apple is going to get nowhere.

            Apple doesn't follow standards.

            Google chose NFC for the Android phones because NFC was a standard, it was well defined, mature and compatible. I can read NFC enabled cards from my phone (all you need is the software to interpret the output). Its only a matter of time before I can make payments via NFC on my Android phone.

            • by swillden (191260)

              Apple doesn't follow standards.

              Bluetooth, USB, GSM/CDMA? Apple follows standards just fine when they need to.

            • by swillden (191260)

              Its only a matter of time before I can make payments via NFC on my Android phone.

              Oh, I should have mentioned... I've been making payments via NFC on my Android phones for nearly three years. Actually, these days I'd say about 80% of my in-person retail purchases are made with my phone.

      • Apparently no one running a retail payment terminal cares.

        Virtually every walmart, walgreens, CVS, and mcdonalds I've seen has one.

        This is a long time coming IMO, but I can still see the tinfoil hat crowd rejecting it. Too much FUD goes around about RFID (like those little credit card faraday cages that some infomercials sell) to make it seem somehow dangerous (I remember when the internet itself was considered dangerous by these types...anybody remember the Sandra Bullock movie "The Net"?)

        In reality though, RFID payment, at least in the Android implementation I'v

      • Maybe your bank has a poor implementation, Hong Kong has had a universal contactless payment through the Oyster card since the 90's. We've had it here in Australia for a couple of years and it works well (I use it every day for everything - packet of gum, glass of beer, groceries etc, and am starting to phase out my wallet). When the bugs are ironed out in your system, this will be the way transactions are done.
        • by jonwil (467024)

          I am in Australia and have Visa PayWave attached to my card yet I never use it (using EFTPOS instead) because there are fees attached to PayWave but not EFTPOS (with my bank at least) and because EFTPOS transactions show up faster and better on my online banking.

          • My bank gives me really good services, I'm more than happy to pay a fair price for these...
            • by EzInKy (115248) on Monday September 01, 2014 @07:29AM (#47799501)

              The only fair price to enable spending your own money is zero.

              • But once spending is enabled, is it somehow bad to provide convenience services that cost very little? Especially if the person is happy to pay for them?

                Because otherwise your post is irrelevant. Posting something true in a limited context but not relevant where it is posted is not insightful.

              • How does this get modded insightful? If you rely purely on paper money, someone has to make that money. Who pays for that? It ain't free buddy, we all pay for that through taxes. Who pays to deliver that money to you? Who pays for the cash register to store it in? Who pays for the mattress you keep it under? Everything has a cost, just because you realise this, doesn't make it any less true. A bank offers convenience, and it too comes at a cost. I'll leave to you to decide if that cost is more or less than
          • by mjwx (966435)

            I am in Australia and have Visa PayWave attached to my card yet I never use it (using EFTPOS instead) because there are fees attached to PayWave but not EFTPOS (with my bank at least) and because EFTPOS transactions show up faster and better on my online banking.

            Australian here, I'll explain this one.

            In Australia you have three options when you pay by card, Savings, Cheque and Credit. These define what network the transaction goes through and that determines what fees and charges are applied to the transaction.

            Savings and Cheque are part of the EFTPOS network and have a small per transaction fee (usually in the vicinity of A$0.20) that the merchant absorbs. This network is Aus/NZ specific and is not related to similarly named networks overseas.
            Credit routes

  • Any idea whether it'll work internationally? Android 4.4 has NFC transaction support but it's only actually supported in the U.S.
    • Re: (Score:2, Informative)

      by citizenr (871508)

      lol? whole europe is using nfc now

      • by DeSigna (522207)

        And Australia's had it for years too. When I ordered it, I had to make sure my phone was the international version with NFC support, because the US model doesn't have it.

    • by _merlin (160982)

      Samsung's latest phones do NFC payment in Australia. There's no reason it couldn't work, besides vendor apathy.

  • Bad timing, Apple (Score:3, Informative)

    by Anonymous Coward on Monday September 01, 2014 @01:51AM (#47798547)

    Considering iCloud was hacked and massive amounts of nude celebrity photos were taken from it, people probably aren't too trusting of your security at this point.

  • What's the big deal? Mobile payment exists since the late 1990s.

    • by bogaboga (793279) on Monday September 01, 2014 @02:19AM (#47798605)

      What's the big deal?

      Hundreds of millions of potential customers will have this technology on Apple's [single] platform. Keyword: "Single."

      Now don't talk of Android because we know it's all fragmented.

      Blackberry? Well, this is of no consequence.

      Microsoft? It still doesn't matter.

      Who else? Got your answer: Anyone cares about this? I doubt.

      Mobile payment exists since the late 1990s.

      Yes, but Apple's gonna finally do it "right."

      • I'm not sure if Google already has a solution (I still use a highly anonymous payment system called cash for most of my financial transactions). But all Android needs is the right API and vendors can potentially design their phones to that spec using components from any of the dozen or so semiconductor manufacturers that matter (Samsung, Qualcomm, Broadcom, etc). I mean why can't the hardware component of the payment system not be a "standard" like Bluetooth or 3G? The software part is clearly Google's prob
      • Re: (Score:3, Insightful)

        by AmiMoJo (196126) *

        Android fragmentation is irrelevant. The number of NFC enabled Android phones vastly outnumbers the number of Apple NFC enabled phones, which is currently zero. Even if the iPhone six sells as well as the iPhone 5 before it the market for Apple vs. Android payments (and all NFC enabled Android devices support it, regardless of OS version) will probably force Apple to be compatible at some stage.

        • by iluvcapra (782887)

          Google has so far been completely lackadaisical about doing the legwork with business partners to enable their NFC payments system. What Google has to do is go on a stage with Visa and MasterCard, and talk about how every POS will be accepting Android NFC payments in 6 months, and we'll give a free phone to every merchant in America who can't afford to upgrade.

          The business deals are necessary before the NFC hardware is useful. Just because Android phones have an antenna and a chip, it doesn't mean that ev

      • by c (8461)

        Hundreds of millions of potential customers will have this technology on Apple's [single] platform. Keyword: "Single."

        Seeing how NFC typically needs hardware support, it would be starting with this generation of devices, and unless Apple does something different from the usual "downgrade existing top tier models and drop the bottom" then only the top end and most expensive models for the next couple years will have it.

        Unless they sell a lower-priced iWatch or some other dongle that "expands" the existing iP

    • by Tamran (1424955)

      This is already available for the iPhone and you can buy it for under $20:

      http://www.shoeme.ca/products/... [shoeme.ca]

  • A few years ago, those Google NFC payment terminals were all over Silicon Valley. Nobody used them. Newer credit card terminals show no sign of supporting them, although some apparently have the hardware inside for it.

    Another problem is that if the technology just requires the phone's presence, not interaction on the phone, it's insecure. "Near field communication" is only supposed to be up to 20cm, but a 2013 paper at Black Hat demonstrated connectivity at 100cm, which is good enough for crime. If it do

    • by _merlin (160982)

      We have NFC credit cards in Australia now. They don't seem to have caused a big uptick in fraud. Also, the worst you could do from a distance (assuming you could communicate with the card for long enough) would be to process a payment of up to $100 - you can't actually copy the card.

      • NFC payment cards in Australia/Europe cryptographically sign a challenge from the terminal, using basically standard crypto. It's EMV all the way. In-person magstripe payments are carefully controlled and risk analysed to ensure they only occur if, for example, the card is broken - or outright banned.

        NFC payments in the USA involve the phone sending regular magstripe data to the terminal, with only the CVC code being some kind of cryptographic derivative - a three digit number (less than 1000). The reason f

        • by _merlin (160982)

          US is really that backwards? And I thought the "offline mode" in Europe where the card verifies the PIN was bad enough.

          • There's an offline mode for payments? I've never seen that in action, and the only portable terminals I have seen have a cellular data connection.

            The card itself is indeed capable of verifying the PIN, which is used for online banking and payments (at least it is in the Netherlands). Online banking uses one-time passwords (OTP), generated by a small dongle into which the bank card is inserted. The card's PIN has to be entered on the dongle every time in order to generate an OTP, and the card will lock
            • by _merlin (160982)

              There's an offline mode that's available in Europe where the card verifies the PIN entered on the terminal. This mode has been shown to be vulnerable to compromised hardware as response for a valid PIN is predictable. The cards in Australia are incapable of verifying the PIN at all - you can set or change your PIN for many cards using an online service without the card present.

        • by mjwx (966435)

          NFC payment cards in Australia/Europe cryptographically sign a challenge from the terminal, using basically standard crypto. It's EMV all the way. In-person magstripe payments are carefully controlled and risk analysed to ensure they only occur if, for example, the card is broken - or outright banned.

          You know nothing about bank security.

          First off, the NFC cards are not cryptographically secure in the slightest. In fact they give out your card number, name and expiry date to anything that asks for it and once a crim has your CC number they can do all manner of things with it from online transactions to cloning the card itself. This app for any NFC enabled android phone can read your card [google.com], last I checked the source code is available for the uncensored version. This is not top secret info, it was based

    • by turp182 (1020263)

      With KitKat (Android 4.4 on a Nexus 5), you press the button to wake the phone, tap on the payment thing (starts Google Wallet, no interaction other than the tap), then enter a PIN number for Google Wallet (the user interaction/verification). There's another tap to verify the total and you are done. There is no scenario that doesn't require the PIN.

      I wish my local grocery stores supported it.

    • It looks like they want to combine NFC with some interaction on the phone. It could be as simple as only allowing payments when the phone is unlocked, so with an iPhone 5S that would mean 1) take phone from pocket, 2) unlock by thumbing the home button / fingerprint scanner, 3) swipe phone past scanner. Perhaps there's a popup to confirm the amount if it's over a certain limit. At the very least, I'd expect such integration to mean that swiping the phone will automatically open the payment app if require
    • by mjwx (966435)

      A few years ago, those Google NFC payment terminals were all over Silicon Valley. Nobody used them. Newer credit card terminals show no sign of supporting them, although some apparently have the hardware inside for it.

      Another problem is that if the technology just requires the phone's presence, not interaction on the phone, it's insecure. "Near field communication" is only supposed to be up to 20cm, but a 2013 paper at Black Hat demonstrated connectivity at 100cm, which is good enough for crime. If it does require interaction on the phone, the user has to activate the phone, navigate to some app, and deal with the app. This is slower than swiping a credit card.

      It's easier to do than card-reader skimmers.

      This is why a phone is better than the NFC cards most people have in their wallet right now.

      The Paywave/Paypass NFC cards will give the card details to anything that asks for them. All the malicious software has to do is follow the spec available to the general public on Visas and Mastercards websites. That's how this little app came about (actually this is the censored version, the source code is available on github). The card gives out the number, name and expiry date... basically everything written on [google.com]

    • by Wraithlyn (133796)

      Love or hate Apple, they're good at simple. There's no way they're going to make people do a full unlock and locate an app for NFC payments, it'll be integrated right into the OS and in all likelihood be disgustingly convenient.

      I imagine something like, you'll have activated NFC from your slide-up tray... then probably just swipe your phone near the merchant terminal, slide to accept an alert box, and then thumbprint to confirm the transaction.

  • NFC exists since several years but there is not exactly general, widespread take-up. Whether you like Apple or not, they are in a good position to enable wide adoption. Their products tend to offer accessible funtionality, and they are big enough to leverage their relationship with the credit card companies, hence I can see them having success.

    Even so this is part of normal technical evolution. If Apple doesn't crack the nut, eventually someone else will. I am more interested in the expected wearable hea
  • by 140Mandak262Jamuna (970587) on Monday September 01, 2014 @04:26AM (#47798943) Journal
    I am really glad something like this is long over due. But I wish we are not jumping from duopoly to a monopoly.

    The cost of handling transactions is steadily diminishing. There was a time it would cost you something between 49$ and 149$ to place a single trade. It dropped to well below 10$ when I was still trading. Would not be surprised if they give you money to place a trade or something now. Compare it to the debit card transaction.

    When it comes to creditcard I would not begrudge the 2% to 5% fee charged to the merchants. The credit card companies are essentially advancing an unsecured loan, and it would cost the individual merchants much more to check and advance credit to their customers. (Of course it there is some real competition the percentage might come down). But it is the debit card transaction that is atrocious. Money comes from the bank, there is no risk involved. There was a very nice system, including PIN numbers to manage the POS terminals. Way back when stock trade was 49$, it was 25 cent per transaction irrespective of the size of transaction. This should have become zero. But that is not what happened.

    The Visa and Mastecard combined to discourage ATM cards and the POS terminals and undermined the system. They made debit and credit card to go through the same system. And the merchants were forced to pay 2% transaction fees on risk free money transfer from one bank to another.

    The time is ripe, with prepaid cards and stored value cards for really cheap and free micro transactions. It took the clout of Apple to hit the music executives on their head and make them wake up, smell the coffee and realize the days of selling single track with 10 more useless tracks for 19$ per CD are gone. It might take such a juggernaut like Apple to make the bankers come around the bend and give up their 2% commission on risk free transactions.

    But I wish we are not going from the duopoly of MC + Visa to a monopoly of AppStore. Well one thing at a time. Once the bankers get used to lower fees commensurate with the cost of transactions, may be alternatives to AppStore might emerge, and the system might become more open.

    • by Mr_Silver (213637)

      There was a very nice system, including PIN numbers to manage the POS terminals. Way back when stock trade was 49$, it was 25 cent per transaction irrespective of the size of transaction. This should have become zero. But that is not what happened.

      The 25 cent transaction fee is charged by the acquiring bank, not Visa and Mastercard - whose fees for debit are typically 1 cent per transaction as they are a volume based business.

      The reason that acquirers charge is because they incur costs associated with that

      • The user could log into the bank account and transfer funds to AppStore account. From there Apple could handle micro payments to the vendors. Vendors cash out from the bank. Completely skipping MC/Visa infrastructure, if the NFC terminals are iPad or iPhone based. Ideally I would like something like this emerge in Android and in iOS so that there is some real viable competition to Visa/MC duopoly.

        But looks like Apple is also talking to MC/Visa. So Apple does not seem to be competing with them, rather it i

  • The recent Cartoon Channel show, 'Chippy', conceived and sponsored by a joint effort between Apple, the Department of Homeland Security and the Internal Revenue Service, has reached a critical mass in terms of viewership according to a recent media rating survey by the National Government Network. The show, which promotes the implantation and use of the Apple iChip and shows DHS agents busting unregistered gun owners, smugglers, drug dealers, black market medical personnel, Constitutionalist terrorists, and
  • Anyone else thinking of Thumb payments in that?

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