The Latest iPhone Update Delivered A Huge Boost To Apple's Bid To Dominate Mobile Payments

Apple just launched its latest update to iOS 7, the software that powers the iPhone and iPad, and it includes a potentially huge improvement to its iBeacon software that helps Apple in its bid to control in the future of mobile commerce.

The idea behind beacons is that they use Bluetooth connections to send messages directly to people's smartphones, meaning that Apple and other retailers can use them to push location-based flash deals, give product info, or simplify mobile payments.

Coupled with TouchID, Apple's fingerprint security on iPhone 5S that makes mobile payments super-secure, an iBeacon network could dominate brick-and-mortar retail if it becomes widely adopted.
Apple is leading the pack with beacon technology because it has enabled almost all of its iOS 7-running devices to both send and receive beacon signals. Other companies, like PayPal and Qualcomm, make dedicated pieces of low-cost hardware that retailers can use to send signals.
So what changed in iOS 7.1? If you have an app installed, it will now "look" for beacons and receive notifications even if it's shut down, the site Beekn discovered. 

Before, you'd have to at least have an app running in the background for it to be able to "hear" beacon signals. This gave retailers who wanted to use iBeacon technology two major hoops to jump through: They first had to convince users to download their dedicated app, and then they needed to prompt people to open up that app once they walked into a store so that their phones could receive beacon signals as they shopped.
Now, even if you haven't opened an app since the day you downloaded it, you will still receive proximity-based messages that will pop up on your iPhone's lock screen, as long as you have Bluetooth on and location-data enabled. 
In order for this mobile payments future to be realized, though, consumers need to get used to the beacon shopping experience and the unbidden real-time notifications that go with it. Getting comfortable with beacon messages means actually starting to receive them. Apple's latest update will allow more retailers to start opting into iBeacon technology, which means more shoppers will be seeing their notifications, which, in turn, leads to more shoppers becoming used to the beacon experience.
"This update shows Apple's continuing to innovate the way beacon technology will be used going forward," says Business Insider Intelligence reporter, Tony Danovo. 
source: http://goo.gl/ZMwTJZ

Read more »

Apple Pay, New and Secure, Wins Fight for Mobile Payments

\
It's quite likely that in a few years, pulling out a credit card – embedded chip or not – will seem like a quaint, old-fashioned way to make a payment. Mobile payment tools, while currently the purview of mostly early adopters, are set to transform the payment process -- offering convenience and advanced security. It's also likely that a late arrival to the payment party will soon be the toast of the technology.

Apply Pay (AAPL), a payment option available for less than three months, is poised by the end of February to overtake the transaction volume of Google (GOOG) Wallet, which was launched in 2011, ITG Investment Research estimates.

But more importantly, Apple Pay could "pose a major threat" to the mobile payment kingpin, eBay's (EBAY) PayPal, according to ITG. Despite the fact that Apple Pay is still vertically bound to serve just its own customers and is supported by a "relatively limited list of merchants," the new service has advantages that PayPal may not be able to overcome.

Analyst Steve Weinstein believes that PayPal suffers from "a challenging relationship" with other companies involved in the payment process and can't offer the biometric security capabilities that Apple Pay can. Apple Pay also has the power of the brand's affinity and an ease of use that will be difficult for competitors to overcome.

Where Early Adopters Are Spending

The security issue is key. As consumers become more concerned about cybertheft and payment hacks, authorizing financial transactions with a quick biometric confirmation -– using a fingerprint, voice command or other personally identifying authentication –- may well become commonplace. That's an area where Apple has a big head start on the field of mobile payment providers.

ITG research, based on interviews with a proprietary consumer panel, discovered other signs of growing Apple adoption. Fully 60 percent of new users triggered Apple Pay mobile payments on multiple days in November, while new PayPal customers used the service on multiple days during the same time period just 20 percent of the time. Apple Pay customers used the service roughly 1.4 times a week during the period -- and at the same merchant for future transactions roughly two-thirds of the time. And once they use it, average Apple Pay consumers use the service for about 5.3 percent of all future card transactions and 2.3 percent of all future card dollars spent.

Perhaps most telling, the top five Apple Pay retailers are businesses with a high volume of repeat business. According to ITG, in November those top-volume merchants were Whole Foods Market (WFM), Walgreen (WAG), McDonald's (MCD), Panera Bread (PNRA) and Subway.
source:  http://goo.gl/XIDnSj

Read more »