About Jonathan Zdziarski:
Respected in his community as an iOS forensics expert, Jonathan is a noted security researcher, penetration tester, and hacker. Author of many books ranging from machine learning to iPhone hacking and software development, Jonathan frequently trains many federal and state law enforcement agencies in digital forensic techniques and assists law enforcement and the military in high profile cases. Jonathan is also inventor on several US patent applications, father of DSPAM and other language classification technology, and an App Store developer. All opinions expressed on this website are the author’s own. Follow Jonathan on Twitter: @JZdziarski View all posts by Jonathan Zdziarski →
Apple Should Have Abandoned NFC and Acquired LoopPay Instead
Is it OK to admit that NFC exists now? Apple’s latest iPhone models now incorporate the near-field communications technology that’s been around in Android phones for a few years… and a little too late, according to many experts. Over a year ago, KPMG ran a story citing NFC had already run its course and was obsolete, lacking widespread adoption in the mobile industry (ironically, they removed this story after the iPhone 6 launch). Companies like PayPal have also tabled the idea of NFC and instead focused on convincing businesses to accept non-POS forms of electronic payments. In the widespread abandonment of NFC, in fact, many new and promising technologies have crept up in its place. Apple’s move to take this dinosaur and incorporate it into their bleeding edge line of products was an antiquated move in light of what they could have done, and the convenience it could have provided to consumers if they had instead looked at alternative technologies.
NFC’s failed adoption in the United States presents an uphill challenge for Apple to break into the contactless payments business, if anything, for the sheer fact that most retail stores aren’t even equipped with the technology – certainly not small businesses. As a consumer, you’ll go to the trouble of getting Apple Pay set up on your device only to find that many stores won’t be accepting it any time soon. For the next year or two, Apple Pay will be an unpredictable phenomenon in stores, at best, due to the lack of NFC hardware in retail.
Many alternative payment companies have attempted to work around NFC, rather than embrace it, with their own solutions that are more compatible with existing infrastructure. One of the best examples of this is LoopPay. LoopPay uses a technology called MST, Magnetic Secure Transmission, to perform contactless electronic payments from your iPhone, using a small fob that you hold up to the magnetic card reader at a store. It’s superior to NFC in that it works with the existing magnetic stripe reader technology making it compatible with virtually all existing POS infrastructure at stores. The consumer simply swipes their cards into the reader at home, then stores all of the data in their digital wallet. When you make a purchase, you just hold the fob up to the terminal, and it creates a magnetic field that makes the stripe reader think it read a card.
In contrast to MST, NFC requires an entirely new POS infrastructure for retail stores – at least in the United States, and that leaves Apple having to help foot the bill through backchannel deals, in order to roll out its new payment system. Had Apple acquired LoopPay, however, Apple Pay could have worked at all existing stores without any new infrastructure. MST could have been integrated with an Apple Pay account, tied to a banking institution, and seamlessly processed just like a credit card at any existing magnetic stripe terminal, with little risk.
Full post on Johnatan blog: http://www.zdziarski.com/blog/?p=3839