“After a decade where NFC (Near Field Communications) has suffered from what Juniper Research called a ‘vicious cycle of indifference,’ the company expects this month’s launch of Apple Pay to boost the technology in the US market,” Jack Schofield reports for ZDNet. “In a white paper, Juniper says: ‘We would now argue that Apple Pay will not only drive, but will create a ‘halo effect’ towards contactless payment in general. We still believe that in most markets this will primarily be driven by contactless card transactions, but that the greater awareness of handset contactless payments that Apple will generate will, in turn, result in an uplift in adoption and usage.'”
“Juniper had been pessimistic about the market after the dismal showing of the NFC-based Google Wallet, launched in 2011, and Apple’s failure to include NFC in the iPhone 5,” Schofield reports. “With the arrival of Apple Pay, based on industry-standard EMV contactless protocols running over NFC, Juniper has changed its view.”
Apple Pay has significant advantages over the unsuccessful Google Wallet. “Instead of the smartphone connecting to a cloud-based server to get the token that is used in the payment process, the Apple Pay token is generated on the smartphone, using an embedded SE (Security Element). This is faster and more secure,” Schofield reports. “Apple also uses its fingerprint-based Touch ID for authentication, as opposed to typing in a four-digit pin.”
“A third advantage is increased privacy. When someone makes a purchase using Apple Pay, the retailer only sees a token, and does not know which card or bank has been used. The retailer can’t store bank card details, email addresses or passwords: it does not have them,” Schofield reports. “This is a disadvantage for the retailers and for companies such as Google, because it stops them from tracking purchases and using the information for loyalty card schemes.”
Read more in the full article here.
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