Today, I came upon an article by Richard Gaywood on The Unofficial Apple Weblog (TUAW.com) that analyzes what the new Google Wallet concept could mean for iPhone users.
In the article, Gaywood gives a good synopsis of the Near Field Communications story, helping readers unfamiliar with the technology get up to speed.
Some key points:
- "NFC isn't a technology standard but rather a wide family of incompatible devices."
- Examples include: RFID key fobs, Hong Kong's Octopus card (1997) and London's Oyster card (2003). "RFID devices could be made much more rugged than traditional magnetic strip cards, and used more quickly than a dip-into-reader microchip card," writes Gaywood.
- "What's clever is that the fob has no power source; there's no battery in there to run out and need replacing. Instead, it gets all its power from the receiver pad itself via an inductive loop, which can wirelessly send small amounts of power over short distances."
- Existing NFC payment methods: Mastercard's PayPass system and Visa's payWave put RFID into a traditional credit card, which allows a customer to pay by waving the card over a receiver at the point of sale.
- Security: "There is less physical protection against fraud with no signature or PIN entry," writes Gaywood. "Consequently, there is a greater emphasis on curbing fraud through tight credit limits -- contactless transactions are typically limited to $25 or so -- and electronic systems that watch accounts for signs of trouble and can remotely override the contactless reader to prompt for a PIN or ask the retailer to obtain a signature. Also, as usual, if you do lose your card or your card is cloned, as long as you comply with your bank's terms and conditions and tell them, fraudulent transactions are covered by it."
- Google vs. Apple: "It's arguable that Google's big, splashy announcement wasn't really warranted for a project that is, at least for the time being, quite limited in scope; it's possible Google was attempting to steal thunder from any announcement by Apple about NFC payments for the iPhone at WWDC next week."
- It's very easy for Apple to replicate the Google Wallet technology. "(But) what I'm more excited about is what happens next. See, Apple already has my credit card details on file via my iTunes account -- so why, necessarily, am I messing around signing my card details separately into some sort of Google Wallet app? Why not just bill directly to my card via the same mechanism as when I buy apps or music? It's the next logical step."
- Extending Apple's financial reach: "And there's even another step beyond that. If some large proportion of all the iPhone owners in the world start routing most of their shop purchases through their iTunes accounts, the amount of money flowing through it will be staggering."