Contactless Intelligence Weekly News Review - Calendar Week 32

Apple and NFC? The world holds its breath…

A touch of sarcasm in a headline never hurt anyone. At least that’s what I keep telling myself. And to be honest, it’s what the technology trade press would have you believe. Especially, if you have been following the latest rumours and ‘leaks’ that continue to swirl in time for the latest Apple announcements, covering the iWatch (if that is to be its name), the NFC addition to the iPhone hardware and even the nature of security surrounding user financial account details (HCE vs SE).

Let’s start with the Apple ‘wearable': Sources have told VentureBeat that Apple has been working with at least one partner, Swatch, to release a line of smartwatches in a variety of branded styles and price points. “While most Apple-watchers and media have been laser-focused on one or two iWatches from Apple itself, the electronics and media giant may actually be working a number of partners in the watch business. Apple and its partners will offer a family of smartwatches to suit all tastes “from geek to chic,” their source says. Digitimes has also reported that Universal Scientific Industrial (USI), an affiliated company of Advanced Semiconductor Engineering (ASE), reportedly has landed SiP module orders from Apple for its iWatch wearable devices, according to industry sources. USI is the sole SiP supplier for iWatch devices, which are expected to come in three versions: one style for men, one for women, and another low-cost version due for release in 2015, the sources indicated.

The SiP modules will incorporate Apple’s CPUs with other chips, including NFC, Bluetooth, analog, MEMS and flash parts, from NXP, AMS, Texas Instruments, Broadcom, Analog Devices (ADI), InvenSense, Skyworks, SanDisk and Toshiba, the sources noted. The cost of each SiP module is estimated at about US$60, or 20% of the iWatch’s estimated retail price of US$300, said the sources. More specifically, the iWatch devices will come with a wireless charging chip from TI, NFC solution jointly developed by NXP and AMS, sensor solution from ADI and gyroscope from InvenSense.

Meanwhile, the web is buzzing with unconfirmed rumours that Apple’s new iPhone 6 will be released on September 19. In a recent leak in Amazon Japan, a source stated that the smartphone will be available for purchase on September 30. iPhone owners may also finally start using the iPhone 6 for payment via NFC,  if you believe the rumors and reports claiming that iPhone 6 features will include mobile payments and recent reports tipped that Apple is currently in talks with Visa and other credit card companies.

NFC rumours get another boost with a set of leaked photographs of the iPhone 6 motherboard being posted on the French technology site, from a ‘reliable and knowledgeable source’ supposedly showing a 802.11ac WiFi card, which ‘allegedly’ includes support for NFC. No one has verified anything at the moment but Cult of Mac puts forward an argument for Apple including NFC in this latest reiteration of the iPhone;  their conversion to NFC may have something to do with the deal cut with China UnionPay recently, and the access to their 3 million QuickPass machines…

Earlier last month, and without any media releases, Apple launched a service, first in Japan then in the US, enabling iPhone and iPod touch users to add funds to their Apple account without the use of a physical card. Called the iTunes Pass, it sits inside the Apple Passbook. Users can obtain credit for their account from Apple stores and then use them within the apple infrastructure online. There has always been the possibility to buy and send Apple credit gift tokens but this scheme allows an apple employee to scan the customers iTunes Pass directly to add the value to the account once the transaction at the point-of-sale is complete.

Bringing a mobile wallet onto the iPhone will inevitably raise security issues to Apple. However, Apple has reportedly told its partners that it will have a security feature, where sensitive and confidential financial information will be stored. It is still unknown whether this piece of hardware will be a secure element in the SIM card or elsewhere, but observers are speculating that it is unlikely that Apple will follow the Android route of using the cloud-based HCE solution to storage and access of secure user data. This means, in my mind at least, that Apple will go down the Secure Element route. During a second quarter earnings call with analysts, Rick Clemmer, CEO of NXP Semiconductor was unusually bullish about the company’s ability in the area of the secure element and using NXP technology to secure any kind of transaction (data or otherwise). 

“We feel very comfortable with the strength of the secure element. We think that the real killer app will have the radio plus the secure element, which provides the security to really be able to protect the individual’s wallet. We think that if somebody is using the radio then there is a weakness; they are trying to use software as the security and clearly that exposes it to additional hacking issues. So we think the secure element plays a very key part of a total mobile transaction solution, providing the security that we all want to have for our individual wallets,” he was reported as saying by NFC World. There were no details on the company’s rumoured deal with Apple to supply the NFC chips for the next iPhone. However, we all love to put two and two together and get four, or five – perhaps even six…

Continuing on the subject of Apple and the mobile wallet, there have been a couple of good articles out last week from the industry itself. We know both companies and their authors but that should not take away anything from what they have to say. Martin Cox, Global Head of Sales at Bell ID penned a post asking “Apple’s iPhone 6 with NFC. Is it a game changer?” In the post, Cox talks about how Apple may bypass the banks and the MNO’s by using the embedded secure element (eSE) along with the user’s payment instrument that is already linked to iTunes. “If this is true, then Apple has a unique solution that does not require them to partner with either issuers or MNOs. That would mean no bank wallet, no relationship with issuers and no tie up with the telcos. Surprise, surprise Apple is apparently going to launch a solution that is focused purely on Apple,” says Cox.

Rupert Englander, Founder and Managing Director of Wooshping, puts out a more sobering point of view in his company’s blog in a post titled, “Apple's last chance saloon?” In the post Englander speaks of how Apple has become ‘innovatingly complacent’ (his words - not mine), by focusing upon product and market positioning, rather than technology innovation. If this is the case - does it even matter if Apple includes NFC technology or a mobile wallet in the latest iteration of their handset? Is it, in fact too late to stop what Englander and other have noticed may be Apple’s long term decline?

Unless we hear anything more concrete on the subject of the Apple iPhone, I think this is going to be the last piece on the topic for a while. After all, if rumours are to be believed, we only have another seven weeks to wait and find out for sure.

Until next week,

Steve Atkins
Contactless Intelligence

MIFARE Contactless 

What do college students, business travelers, sports enthusiasts and visitors of theme parks have in common? They’re all using contactless smart cards to do more than just open doors. In fact, they’re using multi-application smart cards to make purchases, personalize their experiences and access loyalty programs.

Smart cards have become the chameleons of the ID world, adapting to new applications and providing new levels of service, security and flexibility. A quick look at some real-world use cases  – two universities, a hotel, a sports arena and two theme parks  – gives proof that contactless technologies have moved well beyond physical access control...

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GUEST POST: Apple’s iPhone 6 with NFC. Is it a game changer?

A new iPhone is imminent and again there is much fascination in the payments world as to whether Apple will finally join the near field communications (NFC) fray. It now appears that the iPhone 6, which is expected in September, will be the device that sees Apple enter the mobile payments market. As with all Apple launches, speculation has already begun and there are strong rumors that the device will feature NFC and an embedded secure element, but will not support host card emulation (HCE).

For years, card issuers considering a mobile strategy have asked “what about iPhone?” They have been unable to offer an NFC solution to the mobile banking customers that use Apple devices. However, those hoping that the new iPhone will offer them an opportunity to broaden their NFC product range may be disappointed.

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EE to bring Cash on Tap to London Underground – also avoids ‘card-clash’?

Transport for London has announced that Contactless Payments are to arrive on London’s public transport system from this September when customers will be able to use contactless bank cards, or other contactless payment methods including phones, payment tags and wearables to pay on the Tube, the Overground, the DLR, London buses and certain National Rail services. The official launch follows a successful pilot — which involved around 3,000 participants — and the launch of contactless payments across London’s buses in December 2012.

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INFOGRAPHIC: Market readiness for HCE mobile 

Mobile payments continue to make headlines. Trials have come and gone and cross-industry relationships have been set up and crumbled after the honeymoon period. Many of us, I’m sure, have questioned whether mobile NFC payments would ever become a mass-market reality.

Google changed all of this with one announcement in 2013. The incorporation of host card emulation (HCE) into the Android platform brought significant relief to many of the key banks and service providers that have been trying to make progress in launching mobile payments using USIM secure elements.


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Coverage on C-ITV

INFOGRAPHIC: Market readiness for HCE mobile payments? 
EDITORIAL: Mobile, trackable or watchable? The new payment dilemma… 
EE to bring Cash on Tap to London Underground – also avoids 'card-clash'? 
INSIDE Secure, Gemalto sign agreement on SWP license 
Central Group to check out with 2C2P 
Gemalto to offer all-in-one Identity cloud solution 
VIDEO: MasterCard launches MasterPass in South Africa 
GUEST POST: Apple’s iPhone 6 with NFC. Is it a game changer? 
Mobile coupon users to pass 1 Billion by 2019, says Juniper Research 
SIMalliance release updated specs and new app for verification of correct OMAPI implementation 
GUEST POST: MIFARE Contactless Chameleons 
PBZ Group to be first American Express partner to test HCE on the Amex global network; starts in Croatia

Payments & m-Commerce

More Secure Shopping Ahead 
Apple plans to launch mobile wallet this autumn, says report 
Mobile wallet: A distant dream in India ? 
Xbox One gets mobile purchasing and more in August update 
Waitrose showcases QR payments 
Visa okays Chunghwa Telecom's NFC smartphone payments 
Starbucks now processes six million mobile payments a week 
Zuckerberg Confirms: A Mobile Payments System Will Come To Facebook Messenger 
Visa Unveils New Cloud Payment Suite 
Germany's Sparda Bank signs for MasterCard MasterPass 
Nintendo Brings Contactless NFC Payments to Japan 
Allianz Bank Bulgaria to start issuing contactless MasterCard 
Korea: Kakao to launch mobile payment service

NFC & Mobile

Turkish Airlines uses iBeacons to offer free access to digital Sky Library 
What host card emulation means for mobile payment security 
Leaked logic boards revive ‘NFC on iPhone 6’ rumor 
NXP CEO: NFC secure elements will continue to see strong demand’s Contactless Ultrasound Transfer Tech Aims To Best NFC 
Minnesota Twins test mobile photo app for card applications 
HBC department stores Lord & Taylor, Hudson's Bay to use iBeacons 
Xiaomi unveils $13 smart band 
Hilton to let guests unlock their doors with smartphones 
Nestle runs NFC marketing campaign in 480 Woolworth stores across Australia

Transportation, Ticketing, Access, Security & Loyalty

Alipay's mobile ticketing plans could have an impact outside the Far East 
Kiosks give Opal card users option to travel ‘anonymously' 
TransLink’s 7 ‘deadly sins’: Art installation and Compass Card snafu just a couple of its dubious spending decisions 
Australia: Opal card users get anonymous option - with a catch 
Amazon May Be Launching Mobile Point-of-Sale Tech 
Cubic awarded over US$700 million contract to continue service to UK capital

Other News & Opinion Articles

German Bitcoin ATM-maker will go big in the US with 1,000 deployments 
Wooshping Blog: Apple's last chance saloon? 
Big bitcoin players are back on iOS now that Blockchain’s Wallet app is live again 
First Data acquires Gyft, a digital gift card company beloved by bitcoin users

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