“There has been a lot of talk about the addition of an NFC (near field communication) chip to the next-gen iPhone. This will allow the phone to be used as a swipe-it-yourself credit card. I consider this technology to be the most onerous ever,” John C. Dvorak writes for PC Magazine.
“This ‘good idea’ isn’t about the convenience of paying with a phone swipe, but the idea of running your tab through the phone company,” Dvorak writes. “If you think your banker is a gouger with dubious fees and no-leeway, what do you think the phone company will be like? Yes, let AT&T handle all your money for you, and see how that works out in the end.”
Dvorak writes, “Do not let AT&T or Verizon or any phone company anywhere near your day-to-day financial transaction business! You’ve been warned.”
Full article here.
MacDailyNews Take: Speaking of screws, Dvorak’s tinfoil-covered head has more than a couple loose. Unlike Mr. Dvorak, we’ve decided to wait until (1) there actually is an iPhone that allows for NFC payments; and (2) the details of how transactions will be handled are presented, before we issue grim proclamations and dire warnings.
[Thanks to MacDailyNews Reader “Jeff T.” for the heads up.]
So … he thinks the banks are NOT out to screw us out of money?
Who listens to Dvorak? What a schmuck.
Hey John, what was that you said about the mouse? Oh right….
What on earth makes him think the phone company will be involved with any transaction. No more than using an app to do your banking and pay your bills from your iPhone or iPad or even your desktop.
Not thought through very carefully, John. What? You were late for a Tee-Off?
Funny, every time Dvorak appears on twit.tv he’s always whinging that Leo won’t give him a free 11′ MacBook Air.
Besides, if NFC comes to iOs devices won’t it access your iTunes account?
once a gasbag, ever a gasbag
Lets see how it might work. Swipe your phone and it makes a call to your bank or credit card company to see if its OK, then adds the fee. I think the phone company is then a dumb pipe. Any other suggestions on how it might work?
I actually think he has a point and we should be careful of what charges for new technology emerge.
In a pub at the weekend where they charge £1.50 if you want to use a card, because they get hit for 9 charges on each transaction.
If the Telco’s add in another charge …….
AT&T/Verizon will only be the carrier that will serve as an intermediate to transmit an encrypted transaction.
While it may be true that a phone company should not be entrusted with your sensitive banking data, they will never have access to it.
So, Andy, THINK BEFORE YOU SPREAD YOUR FUD™
Wait hold the presses. Dvorak actually has a point or 2 correct. The banks are out to gouge us the phone companies should be trusted even less. Now to advise people not to use or even consider the tech just because one can’t imagine how it could be implemented is just fuddy-duddy. Oh wait it’s John. He is about as old and fuddy-duddy as they get in tech. No wonder he said this, it’s just too much for his old brain.
I only pay by cash using a tertiary intermediate, neither of which know my true name. The two intermediates a chosen from a group of 12 that changes once a month. It may seem like a complex system and, sure, every once in a while a proxy runs off with my cash (don’t even get me started on how I actually get my cash), but it is worth it knowing that The Man cannot track my purchases of diet coke and chips too closely. I know at least one if the group is probably a fed, but I have them deal with transactions for items that I do not actually want just to screw with the data that The Man collects on me.
Sorry, I meant “John C. Dvorak”, rather than “Andy”
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How does this guy bang out these stories so quick on his Commodore 64? I mean, he is living in the 80’s isn’t he? How did he even find this new interweb fad anyway?
@bezoar,
“So … he thinks the banks are NOT out to screw us out of money?”
No, and that’s just the point. The point he is making, which has some validity, is that you don’t want to put your financial life in the hands of someone who can control other aspects of your life.
If you have a credit card and you have bad charges on it, most likely the card company will play nice to keep you as a customer. But sometimes they don’t. Fail to pay your bill and they can hurt your credit rating (maybe) and try to collect on the debt (maybe).
However, this is different from not making house payments and getting evicted, or not making car payments and having your car repossessed, or in the example he gave, not paying bogus phone charges and having no phone service.
He’s sensationalizing of course, as MDN rightfully points out, in that we don’t know if Apple will even launch an NFC payment system and if they did, how it would work.
I would highly suspect that it would work with no direct involvement of the phone carriers whatsoever, and you’d end up with just as much, if not more, protection than you have now.
A great example of how you could have more protection is that this could be set up where you need to put money on the phone in order to use it. You may have the option of using a credit card, or you could buy credits for use on the phone. Look at the iTunes Store. I don’t have a credit card on file with them, but instead put money on my account by purchasing iTunes Gift Cards. That limits my risk to $50 (or whatever amount I chose to put on my account).
At no point could you be billed beyond the amount that’s in your account, or available on the credit card you have on file.
An iPhone NFC payment system that withdrew credit from your account could be an incredibly safe way to do payments.
One word…….. iTunes. I doubt Apple is going to route your payments through the phone company. That’s the crap Google is trying with Android Marketplace app payments.
Why is this dude being a prick. They just started trials in Europe using Visa’s iPhone app and an NFC chip add-on and already he’s condemning it. These people are too quick to criticize.
Didn’t I read that the Japanese have been doing this for a couple of years? and maybe the Swedes?
Wonder how this has been working out for them?
Dvorak Is just a MS subsidized b*tch
Dvorak’s off his meds again!!
I envision something more like gift cards or a prepaid credit card. Have an amount on your “account” that is tied to your chip, wave your phone, charge is removed from your balance. You can reload from a website, iTunes, or from your phone. I don’t think AT&T, Verizon, or any other carrier will handle the transaction for us.
You are all missing the point. The iPhone will be your credit card, and Apple will be your bank. With over $70 Billion in cash Apple is more liquid than any known, bank.
Apple is making ~1% annually on that cash. Apple could undercut merchant fees by a third (merchants will like that), and reduce consumer interest by an equal amount, and make in excess of 12% annually on it’s cash.
Fees aren’t going to go up with an Apple enabled NFC, they will go down.
AND MORE PEOPLE WILL BUY APPLE PRODUCTS.
Will Apple’s approach to this space prove as effective as their latency to the tablet space? Are they now confident the pieces are in place to take DoCoMo’s 1999 work, Nokia’s 2001 solutions, and T_Mobile’s 2003 efforts into the broad mainstrea?
Jobs has spoken at length about being too early, where all facets of the challenge were not ready. He cited the Newton as being as example where their vision was not matched to the silicon (the sophistication of the physical engineering) at the time.
Recent history suggests they believe they are in a good spot.
I have a feeling Dvorak is a genius. He gets to write about technology to show how stupid he is and get paid. He writes about Apple and looks really stupid and get paid. He admits to writing BS to piss Mac users off and he still keeps his job from the publications. So in reality, Dvorak must be a genius. How else can one be so dumb and stupid and still have a job and get paid.
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Everyone seems to be missing the point.
SInce I’m in the credit/debit industry, let me elaborate:
REGULATION is the ISSUE.
Banks are regulated different than phone companies. Banks are required, by law, to reverse charges that you didn’t make (after the first $50). Service providers like phone and cable companies are not. But this is irrelevant. Apple will simply ‘pass-through’ the transactions to your credit card, just like they do a movie, music, or app purchase. AT&T/Verizon will never see the transaction.
What most in our industry are interested in is what share Apple will retain of the merchant processing fees. Apple pays some percentage on every credit card purchase processed through iTunes (which is why they now aggregate many purchases as one to avoid per transaction charges).
Can Apple leverage volume to drive down the merchant fees they’re charged and thus pass savings to the end merchant? They certainly can’t drive them lower than WalMart (who, by the way just managed to convince the Fed to lower merchant fees by 90%, saving them money but passing it along to the consumer!)
There’s a lot at play here and it’s important, as MDN said, to wait and see what happens BEFORE casting stones, doubt, and fear.
@ Jubei
I’m afraid it has more to do with Catch 22 than genius.