New iPhone Fingerprint Tech Could Goose Mobile Payments

Sept. 12, 2013

While Apple-watchers have been waiting for the consumer-electronics company to add NFC capability to the iPhone for some time now , a different addition to the newly unveiled iPhone 5s could have ramifications for the mobile payment industry. The eagerly awaited device contains a fingerprint pad under the Home button that will authenticate the phone’s user and unlock the device.

During the event, Phil Schiller, Apple’s senior vice president of world marketing said the fingerprint scan will substitute for the user’s iTunes password, meaning Touch ID can be used to make mobile purchases of digital content. And, while the Touch ID sensor was designed so the phone could be unlocked without entering a passcode each time it is used, payment authentication for other goods and services is an obvious application. Experts say the technology bears watching, especially if paired with NFC.

“If the fingerprint scanning technology works, it could be a really interesting authentication mechanism,” said Jeremy Gumbley, CTO of CreditCall, a U.K.-based payment service provider. “Having an NFC transaction authenticated by your fingerprint could change the industry and more people would follow suit.  However, when it comes to new devices entering the market, unless this type of function works absolutely perfectly, it could be a real bust.”

Gumbley also pointed out that if Apple hides the fingerprint technology in its “walled garden,” to differentiate its product in a crowded space, consumers could lose out.

“An open cross-platform standard could be an interesting evolution to this technology,” he said.