Commerce Weekly: Apple buys into NFC security

Apple to buy AuthenTec, PayPal teams up with a newspaper, and Google puts its Wallet in the cloud.

Here are a few stories that caught my attention in the commerce space this week.

Apple looking to secure NFC?

Further fueling the rumors the next gen iPhone will include NFC (there hardly seems to be much doubt at this point), Apple announced this week that it will shell out more than $350 million to buy AuthenTec, a technology company that, as Poornima Gupta and Sinead Carew at Reuters describe, “provides mobile security software licenses to companies like Samsung, and fingerprint sensor technology to computer makers such as Hewlett-Packard Co and Dell Inc.”

As with most things Apple, much speculation ensued as to what this pending purchase will mean for the next iPhone. As noted in the post at Reuters, AuthenTec’s fingerprint sensors are used in mobile phones in Japan to authenticate mobile payments. Erica Ogg at GigaOm runs through the evidence pointing to a pending “iWallet,” including: the launch of Passbook; the 400 million credit cards stored in iTunes; and the fact that “[o]ne of [AuthenTec’s] key products is an NFC chip with on-chip encryption, which is designed specifically for mobile payments.” Ogg notes that it’s possible Apple purchased the company so its competitors couldn’t, but points out that “AuthenTec is considered a leader in the secure mobile payments field.”

After the recent NFC hacking demonstration at Black Hat, Apple’s intended acquisition of AuthenTec has also fueled speculation that Apple is looking to provide a level of NFC security that nobody else has. Ian Paul at PCWorld points out that “AuthenTec’s expertise could help Apple bolster the security of any NFC feature it implements. This would also make the iPhone and iPad more appealing to security-conscious IT managers at large corporations.”

Mobile payment conjecture aside, Maribel Lopez at Forbes argues that, sure, Apple could use this company’s technology to help advance the “stalled” mobile payment market in the U.S., but the potential of the technology goes far beyond a mobile wallet. Lopez points out it can be used to manage and verify digital identities, a function that, she argues, will become an inherent part of daily life as services become “people-centric, but device and network agnostic”:

“The future is contextual identity that will be based on multiple factors, including location, device, username/password and possibly biometric authentication. … Fingerprinting recognition in Apple devices could unlock a new age of usability where each user’s preferences and customization could be retrieved by simply pressing a finger on a screen. This could also be combined with the next generation of Siri to enable seamless navigation with voice. The post-PC world needs a new set of navigation and identity tools. It’s clear that Apple is trying to build this via home grown products and strategic acquisitions.”

Lopez’s piece is this week’s recommended read — you can read it in its entirety here.

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PayPal teams with The West Australian daily to cross the digital divide

Embracing digital isn’t the same as assimilating digital — one of the most difficult obstacles in the era of the Internet is figuring out how to successfully integrate digital into traditional sales and business models. Many retailers and newspapers, for instance, have erected digital silos, creating digital products and websites as their own entities, often to the detriment of both the digital and traditional products.

In a post examining the current state and future potential of mobile commerce, Jay Henderson, global strategy program director at EMM, writes:

“Perhaps the biggest obstacle marketers face is the fact that 79 percent are running mobile campaigns in silos, discretely and on an ad hoc basis. In today’s cross-channel world, marketing channels cannot survive on islands where fragmented views of customers compromise the ability to measure overall performance and hinder the customer experience.”

Likewise, much of newspapers’ traditional marketing and advertising efforts have failed to cross the digital divide. PayPal and The West Australian daily newspaper, however, have launched an advertising sales campaign that looks to do just that by making the newspaper’s print product more mobile. A report at Mobile Payments Today describes the campaign:

“The West Australian is including QR codes in advertisements, turning a reader’s mobile device into a personal shopping assistant. … When the newspaper’s readers scan a code, they are taken to a mobile optimized shopping cart that lets them order and pay for the item from their PayPal account … [PayPal’s mobile wallet tool] prepopulates relevant shipping information into order forms so shoppers don’t have to contend with entering information on a small mobile screen.”

You can see the mobile-print campaign in action in the following video:

Mobile wallets enter the cloud

Since its launch a little over a year ago, Google Wallet has seen its share of issues, not the least of which were concerns with security and the fact that it couldn’t seem to establish credit card partners, aside from MasterCard. Google took that bull by the horns this week — it put its wallet in the cloud and now supports all major credit and debit cards.

According to the press release, the cloud-based wallet stores users’ card numbers on Google servers rather than on individual phones, and “[a] wallet ID (virtual card number) is stored in the secure storage area of the phone, and this is used to facilitate transactions at the point of sale.” This change allows for the added credit and debit card support.

The move to the cloud also allows Google to enhance security beyond the Google Wallet PIN. The release states:

“[W]e’re adding a Google Wallet security feature that makes it possible for you to remotely disable your mobile wallet on a lost phone. … When you successfully disable your wallet on a device, Google Wallet will not authorize any transactions attempted with that device*. If the Google Wallet online service can establish a connection to your device, it will remotely reset your mobile wallet, clearing it of card and transaction data.” … [* For now, Google Prepaid Cards and some Citi MasterCard cards will remain active until Google Wallet can remotely connect and reset your mobile wallet.]

The new cloud-based wallet is available now on Google Play. Users will need an NFC-enabled device as well as an Internet connection to register cards, view transactions and to select a card to pay with. Actually paying at the cash register, however, doesn’t require an Internet connection.

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Commerce Weekly is produced as part of a partnership between O’Reilly and PayPal.


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