Apple Just Made Every iOS 8 Device Into A Credit Card Reader.
Square: Moleskine Notes Time.
Optics
Over the last few years when I presented how Apple will begin to change the world of payments I always stated this list:
Magnetics
Sonics
Optics
Radio NFC Bluetooth WiFi Cellular
Use Your Camera To Pay
Today it was discovered by my good friends at 9 to 5 Mac that Apple has included optical payment card reading as a built in feature of the new Safari [1] and part of the new iOS 8. It will be discovered that this is actually an iOS feature in the future.
Specimen of a standard web payment form requiring payment card data.
Specimen of the optical payment card scanning screen.
New Apple Payment Optics: Much, Much More Then It Seems
This feature allows the built in rear or front facing camera to image the payment card and to automatically complete a web based payment form. The important part is the merchant and the website does not need any changes nor will the merchant ever know you are scanning your card. The card image is decoded and data is encrypted and sent in SSL. This is all taking place local in the phone and the Secure Enclave and TouchID will in the future play an even larger role that will radically extend this feature. I will also assert that the iCloud KeyChain will have a surprising interaction to all of this.
Apple has internally developed technology years ago that allows for Apple Gift Cards to be optically read and entered in iTunes. Apple’s new payment optics is just an extension to this early work.
Specimen of the old iTunes Gift Card scanning system.
The Loading System For iWallet
This is a monumental move by Apple. This technology used to require a service like Card.io and Jumio [2], later this summer 80% of iPhones will have this free built in feature. What does this mean? Many, many things. First off, this feature is an amazing time saver for all of us, you simply do not need to enter in your payment card into a web payment form again. But the part that is most important is that Apple has crafted a new feature that will make it ultra easy for you and I to scan the payment cards you and have not yet given to Apple into the iWallet.
No Payment Card Reader Needed
The really, really bad news for startup payment companies is yes, your canceled wallet is safe, however your card reader attached to the 3.5mm Audio Jack, not so safe. See with this single sublime addition Apple has opened the door up to any payment company to allow any consumer to become a micro-merchant. Read this again, Apple just threw a monkey wrench in the business plans of companies like Square by removing the need to distribute a free payment card reader. Get ready for 100s of new micro-merchant payment companies. How long before someone buys Jumio?
Apple Disrupting Square, Not A Good Place To Be (Rant Warning™)
<rant size=quite big warranted=true>
It has not been a good news week for Square. It is now public that Apple is removing the 3.5mm Audio, Jack (making the free card reader much more costly for Square) and today’s news means there is one less barrier to entry for a flood of new Square competitors. Apple has just started to disrupt Square.
I informally, informed Square founders, executives and employees about how Apple would impact their business plans in high resolution detail starting in 2010. There were countless things that they or any payments company could have done to position a path of great success. I gave them the tools to act decisively now they will forever be reacting.
I ask you who reads this now, how valuable would this Apple news have been in 2010? How much wasted time and money would have been saved? If you work at Square it is time to ask executives and board members at the “transparent company” why in the heck have they ignored this. I have dozens of friends who work at Square and are perhaps some of the most brilliant people I have come to know and it is my hope this post can help foster the change you have been seeking.
I always feared my voice was not loud enough over the years. CAN YOU HEAR ME NOW?
</rant>
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[1] http://9to5mac.com/2014/06/05/safari-in-ios-8-uses-camera-to-scan-and-enter-credit-card-info/
[2] Card.io and Page on jumio.com
