Tim Green: Touch ID will not turn Apple into a payments company | Mobile Devices | Mobile Entertainment

Tim Green: Touch ID will not turn Apple into a payments company

Tim Green: Touch ID will not turn Apple into a payments company
Tim Green


Devices / iPhone / September 12th 2013 at 1:49PM

Ignore the hype. Fingerprint scanning is about selling more iPhones. And it will probably succeed.

Was this the week that Apple moved closer to mobile payments?

The analysts would so love this to be true. They're desperate for a 'Bank of Apple', and they think they've seen its first down payment in the form of Touch ID. 

I beg to differ.

I don't see how fingerprint scanning leads inevitably to Apple becoming PayPal.

And I'm going to explain why.

To refresh your memories, the iPhone 5s features Touch ID, a sensor built into the home button that recognises your fingerprint.

What does this mean? Well, instead of locking your iPhone with a passcode, you can simply touch to unlock.

Now, there's been lots of nonsense written about this being the end of the PIN. It's not. Should your fingerprint scan fail for any reason, the phone will default to PIN mode.

And there are plenty of reasons why it should fail. First off, there's the family member whom you may wish to have access to your device (you can assign multiple fingerprints, but you may prefer to just give them your PIN).

Also, your own fingerprint might fail. You may have had your digit sliced off by a kidnapper. Or worse, a really nasty paper cut.

(Actually, Apple reckons its tech senses 'sub-epidermal skin layers' which makes it better able to identify damaged fingers and reject scam attempts).

But anyway, the point about fingerprint sensors – as has been argued many times – is not that they are secure, but that they are convenient.

The difference between authenticating someone in a split second with a key press, as opposed to five to ten seconds when someone has to open an app and key in a PIN – well, it's huge.

As usual, Apple is easing people into the concept.

So, it's starting with the unlock function, and it's stated that it will also use fingerprint ID to complete iTunes purchases.

Now, this is the bit that makes commerators believe Apple will move into mobile payments.

I just don't get this.

Of course, it depends what you mean by payments.

Let's pursue to 'whole hog' theory.

Here, Apple decides it wants to be a payment provider like PayPal. It launches an iWallet Passbook app into which you can move your money and then use it to make purchases anywhere (validated quickly with a fingerprint scan).

This app is pre-loaded into iOS, so every Apple owner can use it straight from the desktop.

The logic is that Apple already has 500m credit cards on its system; this is the obvious next step.

But as I've written before, there's a huge difference between using an iTunes account to buy stuff from Apple's own music/app stores and extending this facility to buy anything anywhere.

Think of the regulations, the customer care, the refunds, the POS integration, the inability to charge 30 per cent.

I just don't see Apple doing this.

Also, there would be huge resistance from banks and credit card firms. These guys don't want to be turned into dumb money pipes by OTTs who cream off all the valuable transactional data.

They don't like Google Wallet, and they distrust PayPal so much they've considered charging it a punitive levy.

Then there are the retailers. In the US, Wal-mart, Target, Dunkin Donuts and dozens of others have all teamed up to create MCX. This is a mobile wallet you can use in any of those stores, which will give you rewards and offers.

Why does MCX exist? Because it doesn't want someone else owning its transactional data. 

So, what can Apple do with fingerprint scanning?

Well, it can take its API to groups like MCX (and Weve and PingIt in the UK, and loads more) and supercharge the payments process for them.

See the barcode on that advert for wine? Scan it, check the payment details are correct and then use your finger to buy. That's it.

That seems to me the obvious future direction for Touch ID.

Does that make Apple a payments provider? No, not really. It makes it a payments enabler.

Now, you might be thinking. Mmmm, a payments enabler that doesn't get any transactional data or revenue.

True. But if this stuff captures the imagination, it'll bolster Apple's rep as the market's true innovator. And Apple will sell more iPhones as a result.

So there it is – the shocking conclusion: Apple's new tech could help it shift more units.

The interesting bit will be how Samsung et al imitate the tech. If the payments firms embrace fingerprint recognition, they'll want it to work for all their consumers.

Owning Authentec must give Apple a stack of valuable patents...