Welcome to the bank of Apple

Payments, fingerprints and the iPhone 5S

If you don’t think Apple is angling to become the way that we pay for things… you are kidding yourself.

If one thing is clear from the announcement of the iPhone 5S, it’s that Apple is accelerating the timeline in making the iPhone / iTunes ecosystem the default method for paying for goods, be they digital or physical goods.

If you’re investing in NFC right now. Stop.

If you’re developing a new system for processing traditional credit card payments. Back away from the keyboard.

If you think that Visa or MasterCard or Paypal or Interac can beat this, I have a bridge to sell you.

The combination of Passbook and iBeacon in iOS7 alongside the fingerprint sensor in the iPhone 5S have the possibility to completely reinvent how we manage and secure the process of discovering goods and making payments.

If you’re unfamiliar with these things, let me digress for a moment.


There are three main components now in place that put Apple at the center of finding and buying goods.

  1. Passbook, first introduced by Apple in iOS6, seemed little more than an easily deployable system for displaying boarding passes, movie tickets and my Starbucks Card, really anything with a barcode that required scanning. Passbook, though, is so much more than what it first appeared be and is now Apple’s catchall app for iPhone users to keep the above items, but more importantly their digital coupons, gift rewards and loyalty cards, all of which can be triggered by location, time and user activity.
  2. iBeacon, a software system inside of iOS 7 paired with physical hardware ( so far called iBeacons ), will offer an unprecedented level of detail in knowing precisely where people are inside of physical locations and how close they are to objects or products. Apple’s iBeacons, use the Bluetooth Low Energy profile to determine precise location ( microlocation ). In plain speak, this means your iOS device can use Bluetooth 4.0 devices to collect precise location data—like your location inside a physical space—even on devices that don’t have a GPS system installed.
  3. Fingerprint Sensors in the iPhone 5S will bring about a fundamental shift in how we think about security, personalization and what we allow our devices to handle for us. As a first step, Apple has introduced the concept of securing and unlocking the new iPhones using fingerprint recognition. Also possible using the iPhone 5S is approving iTunes Store purchases with that same touch of a finger. Pretty straightforward to be sure, now how long until Apple allows verification for any purchase to be approved through the same process, attached to the 600 million credit cards on file with iTunes?

So imagine a scenario where, as you walk down the street, a Passbook notification informs you of a promotion at a store around the corner, upon entering the store iBeacons will detect your location and highlight a discount on the sweaters you’re standing near, grabbing a sweater in your size you then confirm the purchase by simply holding your finger on your phone’s home button for a few moments to approve a subsequent charge through Apple/iTunes on your credit card.

As a consumer, I love it. As a marketer, though, I’m giddy at the possibilities and for Apple it’s the perfect storm of disruption; less friction, low cost implementation and a new standard for end user security. We’ve got some things in the works both at Endloop and at our new venture Norm that fit into this space, I’m excited to hear the reaction as we make more announcements about what we’re doing.


*Sidenote: At least with the iPhone 5S, thieves will not in fact be able to cut off your finger to subvert the new fingerprint reader. The sensor requires living tissue for its reading: using not the layer of dead skin on the surface, but rather the still living tissue below.

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