Apple Predicted to Adopt NFC in iPhone 6 as Core Technology for Mobile Payments System

[rols]

I think I need to drop some knowledge:

1) iBeacons is one-way, from the beacon to the device. Already a non-starter.
2) Bluetooth LE requires pairing which in the over-polluted 2.4Ghz spectrum is a horrendous experience.
3) WiFi is even worse since it's not secure until you have a password, and how do you get that in the first place?

Bluetooth and WiFi have even worse problems because they actually work over a long range. The last thing you need is someone capturing traffic to decrypt later (hence the *near* part in NFC).

People need to stop confusing the technology (NFC) with the implementation (whatever Apple does with it - hooking in TouchID, credit cards, etc..). They aren't the same.

As far as my reasons for why Apple hasn't included NFC:
1) Chassis only changes once every 2 years. The current design is already packed, and you need a rather large (but thin) NFC antenna to work. And every rumor out there says iPhone 6 will be bigger than the 5S.
2) Integration of NFC into wireless chipset (Bluetooth, WiFi) wasn't available until last year.

Finally a sensible post about the differences between iBeacon / BTLE and WiFi and why they aren't NFC and not suitable for payments.

I'll add one more, as well as encrypted BTLE requiring pairing, it's not particularly secure. The 6 digit pairing pin which is what you most often see used gives very little security and even a sniffer based on small mobile chips can test those combinations in a fraction of a second and sniff the encrypted link as long as it listens to the entire conversation, it's literally a matter of trying them out. Classic Bluetooth doesn't have this issue by the way and one day the SIG is going to have to address this.

The one secure way of pairing is an out of band key, which needs to be transmitted over a separate, secure, channel .. the one most often mentioned in the bluetooth spec for that is .. NFC.

I think NFC is going to happen. It's a complementary technology. I think it would dovetail with passbook (scan or wave the phone, same effect, subtract value from the same Starbucks card for instance). It's pretty free to put it in the phone, the chipsets have the capability anyway. There's a load of ways they can integrate it into the phone to add value and it opens doors for lots of applications.

Is it happening this year? That I'm not sure. When I first saw passbook I figured one day NFC was coming to pair with it, might be this year.

 

[rols]

BLE does not require pairing-- you're confusing it with Bluetooth Classic.

BTLE requires pairing in order for the link to be encrypted. Pairing is the process by which keys are exchanged to encrypt the link. BTLE has a distinction between pairing and bonding (long-term key storage) which classic bluetooth has as one step.

 

[jm001]

What? Why are we talking about the iPhone 3GS? Oh wait is this about the iPhone 4? 4S? 5? 5S? Yawn. Another NFC on the iPhone article.

 

[captain kaos]

If they do adopt it, I think it wil be for the iwatch.

Yep, agree. How nice would it be for you to be able to scan your bus ticket with a swipe of your wrist!

 

[reidconti]

NFC is all but guaranteed in the next iPhone. Here's why.

As of October 2015, US banks will put the onus on retailers to use EMV credit card terminals. The technology is also known as chip-and-pin, and widely used in the rest of the world. Currently retailers are not liable for fraudulent transactions. However, once the liability switch happens in October 2015, the "less secure" end will be the liable end. EG, if the bank didn't give out EMV cards to their customers, they're liable. If they DO, but the retailer doesn't have an EMV-capable terminal/reader, the retailer becomes liable for the fraud. Same goes for the credit card processors -- if they can't deal with EMV, they become the liable party.

So Real Soon Like Now you'll have banks pushing EMV cards on you to beat the rush.

What you may NOT know is that the liability shift requires not just EMV-capable terminals, but NFC-capable terminals.

Furthermore, if a retailer clears 75% or more of their transactions from an EMV *and* NFC-capable terminal, they're exempt from PCI audit requirements, which is also a huge deal.

I was at the dentist a few weeks ago and saw they had an EMV+NFC terminal. I was interested, because I'm looking forward to the EMV rollout, and asked the receptionist about it. She said the company they get their terminals from said the upgrade would be "free" if they did it now, but it would cost money in the future. Now, I assume these are leased terminals, so "free" probably means no upgrade charge and the rental fee remains the same. If they wait until the last minute when there's a huge rush to get the terminals manufactured and installed and troubleshot, it will be more costly for the companies that distribute them.

So, NFC is not dead. In fact, over the next 16 months the US is likely to go from behind the curve in terms of payment systems, to ahead of the curve, as virtually everyone will be upgrading to EMV and NFC capable terminals.

If Apple wants to avoid having Android phones eat their lunch, they need to start distributing them ASAP. Waiting until the 2015 iPhone revision is a non-starter -- we'll start seeing these terminals very soon.

Likely the phones will have NFC, but other posters here are right -- wearables (wrist bands) are going to be the best way to pay, versus whipping your phone out of your pocket -- which isn't really any more convenient than taking a card out of your pocket.

 

[Analog Kid]

Hardly.

It's no different than someone using your credit card number. You are not responsible for charges you didn't make.

In fact, NFC has some big security advantages over a normal credit or debit card:

• It's really easy for a thief to copy or swipe a card number. NFC: impossible.
  
• Credit cards usually have high purchase limits. NFC: usually requires a PIN above say, $20.
  
• Credit cards can be used over the internet or phone. NFC: no.

I think you're looking at this sideways and mixing technologies and applications.

NFC is a communications technology, just like BLE, mag strips, QR codes and the keyboard.

People seem to like it because it's longer range than a mag strip. That means you don't have to guide it into a slot to complete a transaction. That also means that it's subject to snooping.

If the NFC payload is nothing but an identifier, like a credit card number, it is easier to steal than it would be to swipe. You wouldn't even need physical control of the device, just an antenna. Is it a more complex transaction than this? I'm not sure how it could be on a passive plastic card, but a phone could get fancier. Maybe rols knows.

It's the usage model that doesn't put PINs on card transactions. Most of mine require either a PIN or zip code at unmanned terminals.

There's nothing about the mag strip that permits internet orders, we do it by manually typing the number into a keyboard. The same would be used with an NFC enabled token-- or if the token is your phone, then it could enter it into the transaction for you.

I think what crsh1976 was getting at though was the inherent conflict between ease of use and security. Swiping our cards is currently how we both keep the information transfer controlled, and signal the intent to transact. If we take that action away, how do we know which transactions are intended? The NFC systems I've seen to date signal intent by placing the token on a pad right next to the swipe slot-- essentially it's the same action with more silicon. Once the application constraints get looser than that, it starts to get risky.

In the end, I don't see how it's going to be all that different from card transactions, and I don't see how NFC specifically needs to be the solution.

----------

Finally a sensible post about the differences between iBeacon / BTLE and WiFi and why they aren't NFC and not suitable for payments.

How is NFC secured?

 

[i0Nic]

NFC has been used for mobile payments in many countries for years, in Australia for example pretty much all checkouts are fitted with NFC paywave technology. I definitely welcome Apple adding this basic feature to their phone.

I understand in the USA this is still in early adoption, but if Apple want to be world competitor they need to add features the rest of the world uses.

 

[brewcitywi]

Me too

MFC for me, but I won't tell any more.

KFC for me, thanks

 

[kdarling]

I think you're looking at this sideways and mixing technologies and applications.

I was responding to a comment that "this stuff is a personal finance disaster waiting to happen." Since (at least in the US) you're covered by the same kind of protection as credit cards, that's a unwarranted fear.

NFC is a communications technology, just like BLE, mag strips, QR codes and the keyboard.

Exactly. I've said this many times. NFC is just a comm method. It's as secure or insecure as the data being sent over it.

If the NFC payload is nothing but an identifier, like a credit card number, it is easier to steal than it would be to swipe.

With NFC payments, just as with a chip and PIN credit card, the payload is encrypted. So no, you cannot steal the account id by listening in.

The big difference is that with a credit card, the account number and security code is printed right on it (along with your name, in case someone wants to find your home as well), so it's easier for your account number to be stolen and used. If it's an old style magnetic stripe card, it can even be cloned.

(I've had a CC number stolen several times over the past decade, usually after dining at a new restaurant out of town. Each time my credit card company noticed the resulting unusual purchases and of course I was not liable for them.)

I think what crsh1976 was getting at though was the inherent conflict between ease of use and security. Swiping our cards is currently how we both keep the information transfer controlled, and signal the intent to transact. If we take that action away, how do we know which transactions are intended?

If you're worried about that, you can usually set an NFC payment app to always require a PIN, not just when a store requires it when you pass their limit.

In the end, I don't see how it's going to be all that different from card transactions, and I don't see how NFC specifically needs to be the solution.

Agreed, NFC doesn't have to be the only solution, but it's certainly a leading contender right now worldwide. Most credit card companies are supporting both regular chip and PIN (EMV), and EMV over NFC.

 

[ppc_michael]

inb4 the phone I had two years ago is suddenly "innovation."

 

[cal321]

Let me help you understand why everyone is so against this technology.

Its because they aren't. If you read the first 24 replies to this thread alone, there are at least 15 replies that are either pro NFC or at the very least, neutral.

Where you are struggling is that you have in your head that a few people who question the value of the technology constitutes "everyone" being against the technology.

I don't personally know what the value NFC would bring to my life. I did a search on google to see if there were some very easy to understand points that would resonate with me. Could not find anything easy to understand on the first page of results. Sure, lots of results with "sophisticated" sounding explanations. But nothing that helps me understand what I am missing by not having NFC in my life.

That does not make me "against" NFC. It just makes me either ignorant to its benefits or not have any problems that NFC solves.

Well I was partly referring to the countless remarks I've seen on other MR stories on NFC. Ok perhaps people are not against it per se, but they are not embracing it, or finding any ways in which it could benefit their lives.

For me, being able to use it on London buses and the tube network, without having to remember my oyster card, as well as automatically being able to top it up all on the phone, would be a very useful reason. Or being able to pay for purchases under £15 without entering a pin code/or touch ID, (the vast majority of places in London now accept contactless), and then also being able to store debit and credit cards for larger purchases provided their is security such as Touch ID, makes it very convenient. My gym card and university library card are also NFC, so even fewer cards to remember.

Does that help you understand why you might be missing it in your life? (Thought I'd imitate your condescending tone)

 

[draugminaion]

Before people complain about stores, lots of stores have the hardware, just not activated....Ahem...Walgreens, Walmart, Target.....

The NFC reading hardware is under the screen, and when activated, the screen will show a tap to pay sign, like Whole Foods

----------



Merchants have more stringent security standards, and must use specialized equipment to be PCI compliant. An iPhone by itself won't read regular Mag Stripe, chip & PIN, or provide a PCI compliant encrypted PIN pad...also, no laser barcode scanner.

The new POS sleds are Verifone PayWare units readily available for any store to purchase and implement.

Yes, getting the thing certified is certainly an issue. Having NFC in the sled, even if the iPhone has it too, could well be the way to go.

 

[draugminaion]

Interesting. Yes, the new sleds will have RFID and chip & pin.

As for using older phones, Apple used older devices (4th generation or earlier) for their previous POS terminals, didn't they?

That said, new card readers nowadays apparently often come with both chip & pin, and NFC. No choice about it. (*)

Yes, but this thing is made special for the iPhone, they could do one without NFC. Still, these things take time to develop and certify, doing it for the iPhone6 might well delay this another year. Plus having NFC external to the sled will certainly complicate certification a lot.

So it's quite possible that the new sled simply comes in no other configuration, and just having NFC does not indicate any particular Apple intent, even though they'll be physically ready to accept such payments.

(*) I've read that the US might leapfrog Europe when it comes to NFC, ironically because of the US being so late to the chip & pin world... since all the late upgrades to card terminals will automatically come with NFC capability as well.

Yes, that is often the way things work. The cities that were first with gas street lighting were the last to go electric.

 

[SactoGuy18]

Before everyone dismisses the whole idea, don't forget the following things:

1. The iPhone 6 models will go to a totally new case design. As such, it can finally incorporate an NFC radio/antenna subsystem without increasing the thickness of the case itself.

2. They're doing this not only because of the China UnionPay deal for mobile payments, but also at the request of Japanese and South Korean cellphone carriers who want NFC on the iPhone so it can be used for mobile payment systems such as the JR East Suica system and the Seven & i Holdings' nanaco system.

3. Apple has to do this because they're finding out that nobody wants to build a true universal point-of-sale terminal based on Bluetooth 4.0 (LE). This may be due to security issues, since the range of Bluetooth 4.0 is measured in tens of feet, while the range of NFC is only a few centimeters.

 

[Fishticks]

Originally Posted by Dave.UK View Post

Insert

"Apple will never adopt NFC"
"NFC is dead technology"
"NFC is a fad"

Insert "anti fan-boy" fan boy statements here.

Insert zombie-fanboy statement here.

 

[Zxxv]

NFC in the iWatch. Back comes the age old art of watch theft. Or has apple come up with a new way of securing the iWatch?

will it be a feature...welded on for you at the iStore

in other news - sales of axes and saws go up

 

[draugminaion]

Before everyone dismisses the whole idea, don't forget the following things:

1. The iPhone 6 models will go to a totally new case design. As such, it can finally incorporate an NFC radio/antenna subsystem without increasing the thickness of the case itself.

2. They're doing this not only because of the China UnionPay deal for mobile payments, but also at the request of Japanese and South Korean cellphone carriers who want NFC on the iPhone so it can be used for mobile payment systems such as the JR East Suica system and the Seven & i Holdings' nanaco system.

In Europe and US there is a big push for NFC. Pretty soon every POS that can do swipe/contact/PIN will do contactless, i.e. NFC. NFC payments options will be everywhere quite soon. So if Apple is going into mobile payments, ignoring NFC will not make a lot of sense.
Also. The Motley Fool, who always get everything about Apple backwards, says to ignore the rumor. Another reason to believe.

3. Apple has to do this because they're finding out that nobody wants to build a true universal point-of-sale terminal based on Bluetooth 4.0 (LE). This may be due to security issues, since the range of Bluetooth 4.0 is measured in tens of feet, while the range of NFC is only a few centimeters.

Yes, and with NFC the bits can be intercepted directly, they will be encrypted but you will have something to start with. Also standing in one specific spot doing specific things that makes it obvious you are involved in a finacial transaction does not enhance security. Bluetooth uses frequency hopping, intercepting the bits is going to be several orders of magnitude harder. And since with Bluetooth (or wifi) you can pay anywhere by doing things that do not look significantly different from web browsing or texting, nobody knows you are paying.

NFC is not the future, it's the past that finally caught up with today.
If indeed NFC is starting to happen this year and it's not a false alarm like previous years.

 

[Keane16]

Ok, so wake me up when it's dead then, and I mean everywhere. Apart from what I have already said, there is sometimes the need for cash, so we also need NFC accepting ATMs.

Ha, no need for me to wake anyone up. Technology will march on regardless of what you or I want. The majority will use it IF it's beneficial. I'm just glad you've moved on from thinking this idea is 'redundant'.

One of my banks in the UK already allows me to withdraw money from select ATMs without a card, or any other fancy technology. Just open the banking app and you get a code which you enter at the ATM: https://itunes.apple.com/gb/app/natwest/id334855322?mt=8

My Barclaycard offers a 'pay tag' which allows me to pay for goods without needing my credit card (the idea is you stick the tag to your phone, however with NFC this would be redundant): http://www.barclaycard.co.uk/business/accepting-payments/face-to-face/pay-tag

I used to carry 2 debit cards and a credit card in my wallet as recently as ~2 years ago, and due to these 2 advancements I now only carry 1 debit card. Plus a few store cards - which if the retailers shake a leg can be replaced by a barcode/QR code within their respective apps (like Tesco, Subway etc. already do).

 

[Beautyspin]

Overall this is good because tech that Apple adopts, even if pre-existing elsewhere, now becomes more mainstream and optimized for broader use which cascades down to existing platforms with tech already in place.

I do not own an iPhone but a Z1 but even I am waiting for this to happen for exactly the same reason..

 

[subsonix]

Ha, no need for me to wake anyone up. Technology will march on regardless of what you or I want. The majority will use it IF it's beneficial. I'm just glad you've moved on from thinking this idea is 'redundant'.

I don't see what your point is. That all caps IF, is exactly what this is dependent on to be successful. I merely question if the benefit will be large enough for that to happen. From the perspective that you one day will be able to get rid of your wallet, it is also dependent on that it's replaced everywhere. "Technology will march on regardless of what you or I want" is a problem if no one asks for the utility it brings, new things is not magically better, simply by being new.

 

[maslan123]

To be absolutely honest, I've not seen one NFC payment platform anywhere in my life, and I've heard others say the same.

Must be your area - i see them everywhere here in Va. All the WaWa's, gas stations, 7-11's, Walgreens, Rite-Aid, etc.... They all have it here. You may not recognize it as it does not say NFC Payments.

 

[Keane16]

I don't see what your point is. That all caps IF, is exactly what this is dependent on to be successful. I merely question if the benefit will be large enough for that to happen. From the perspective that you one day will be able to get rid of your wallet, it is also dependent on that it's replaced everywhere. "Technology will march on regardless of what you or I want" is a problem if no one asks for the utility it brings, new things is not magically better, simply by being new.

The utility is brings is pretty obvious:

1. Less cards to carry
2. More secure
3. Quicker
4. Electronic receipts, paper only if required

The reason for the if, was due to the fact that many have tried - e.g. Google Wallet - and ultimately failed. The implementation IMO was not right in many offerings. That's, why the Apple potential excites me, from my first message:

Easy payment using your iPhone secured by TouchID and billed straight to your iTunes account.

That's what I'd like to see. Walk into a store and instead of inserting a card, I swipe my phone, hold my thumb over the sensor and payment is processed straight to the iTunes account. The receipt is stored in a theoretical 'iReceipt' app, and you can ask for a printed version if you want.

You don't see the benefit. That's fine. As I said a few messages back - your cash and cards are going nowhere. I'm just excited for progression.

 

[subsonix]

The utility is brings is pretty obvious:

1. Less cards to carry
2. More secure
3. Quicker
4. Electronic receipts, paper only if required

The reason for the if, was due to the fact that many have tried - e.g. Google Wallet - and ultimately failed. The implementation IMO was not right in many offerings. That's, why the Apple potential excites me, from my first message:

It has not happened yet, so it's still an if, it's simply your opinion about what you think is an inevitable outcome. The jury is still out on if it's more secure, or will succeed.

 

[linuxcooldude]

3. Apple has to do this because they're finding out that nobody wants to build a true universal point-of-sale terminal based on Bluetooth 4.0 (LE). This may be due to security issues, since the range of Bluetooth 4.0 is measured in tens of feet, while the range of NFC is only a few centimeters.

It seems you are searching for a reason why this won't work rather then a statement of fact. I don't think retailers tell themselves the range of wireless chips will make it more likely for theft. Most are simply not that knowledgeable in such technology.

If anything they would be more concerned with customers handing over credit cards that can be copied by employees is far more easily.

But for Apple to be the most successful in retail is for them to control the financial transaction. Going NFC takes that control and transfers it to banks and payment centers.

While conventional terminals utilize NFC, Apple has their payment system built-in to all its Mac, iPhones & iPads by using Bluetooth LE. Apple already has many of its 800 million customers with Apple ID's that can be authorized through TouchID. Obviously retail store would have to install Apple hardware whether it be an iMac or even POS centered around an iPad.

While Apple could still use NFC, it could be more of a backup plan and perhaps why they have waited so long to even consider implementing it yet.

 

[kobalap]

Well I was partly referring to the countless remarks I've seen on other MR stories on NFC. Ok perhaps people are not against it per se, but they are not embracing it, or finding any ways in which it could benefit their lives.

If you read this thread alone, there are far more NFC advocates than there are NFC opponents. I mean, I can't actually see one person seriously saying that they are against NFC. Simply that the value of it is not clear to them.

People in general have far more important/interesting things to do with their lives than to look for ways that some obscure technology (NFC) could benefit their lives. This will always be the case. If you lead talking about the technology, the masses will fall asleep. If you lead with a problem and your solution to the problem, some will take note. I can't imagine either my wife or my kid know what the heck NFC is. But if you ask them if they would want to be able to share pics just by bumping phones, they might be interested.

Me personally, consolidating payment methods into my cell phone is about #50 on the list of things I would like optimized in my life. I am feeling far more angst/anguish at the complexity of home automation. Second to that is the incredibly clunky nature of smartphone and car integration. I would dump my iPhone in a second if Android had both of these areas figured out.

Does that help you understand why you might be missing it in your life? (Thought I'd imitate your condescending tone)

Well no, actually. I have a reasonable sense of what is more difficult in my life than it has to be. Carrying 1 credit card and 1 driver's license is hardly a hardship. I've never struggled with sharing photos with people or URLs or maps information. I understand the benefits that are seemingly intuitive. They just don't resonate with me.

And I apologize if I sounded condescending. I just react badly when people post something as silly sounding as "everyone is so against this technology" when the fact is, the overwhelming majority of the posters are advocates.