Apple fingerprint authentication emerged as a potentially important component of the company’s mobile security strategy following its acquisition of fingerprint technology company AuthenTec. While the deal fueled speculation about Apple’s future plans for mobile payments, biometric authentication and payment initiation represent two distinct functions. A fingerprint scanner could strengthen device and application security without necessarily becoming the mechanism consumers use to initiate transactions.
For Apple, stronger authentication could nevertheless lay important groundwork for future financial services. With hundreds of millions of iTunes accounts and significant consumer trust in its ecosystem, improving device security could give Apple a stronger foundation for eventually expanding into payments. Rather than rushing into the market, Apple had an opportunity to establish secure biometric authentication first and determine later how that technology could complement payment applications.
Apple tea-leaf reading continues with this article that confuses a biometric identity solution with a payment transaction initiation method.
Apple’s recent acquisition of fingerprint reader maker and IP patent holder AuthenTec does indeed signal that Apple will, likely next year, add a finger print scanner to its line of smartphones and tablets. That demonstrates, at the very least, that Apple wants to add stronger security for device access and that the fingerprint will be used to unlock the device as a PIN or finger swipe does today. Fingerprint readers in phones is a feature that’s been available in Japan for years.
But a fingerprint scan is not necessarily a payment transaction initiation or approval method. That could still be a PIN or a gesture. Or an NFC-based tap at a payment terminal. Unlocking a device or an app in order to make a payment? Sure. But while the acquisition signals Apple is serious about device security (the iPhone is the smartphone model and operating system preferred over Google’s Android by enterprise customers), a straight line between fingerprint scanning and payments can’t be drawn.
Apple should be in no hurry to get into the payments business. iTunes is a small contributor to its revenue. The trust of the 400 million iTunes accountholders is enormously valuable. With a strong security infrastructure in place, then Apple will be in a strong position to bring it to consumers and to payments industry stakeholders. And to dictate terms. But until then, and don’t expect to see AuthenTec’s capability in the next model iPhone. Apple can just take its time.
Expect to see fingerprint scanning capability embedded in the screen of these devices instead of via a separate reader somewhere else on the case.
From Mobile Commerce Daily:
Apple has acquired mobile security firm AuthenTec for $355 million, which could be the first step in a mobile payments solution where the final step would have users swiping their fingers on their iPhone screens instead of tapping the phone on a physical point-of-sale device.
While Apple is taking its time entering the mobile payments space in any signficant way, several recent steps reinforce the idea that payments are a focus. In addition to acquirsing AuthenTec, the company also recently introduced Passbook, a new app that brings together a user’s loyalty cards, coupons, airline passes and movie tickets in a single place.
Apple fingerprint authentication had implications extending well beyond simply unlocking an iPhone. Biometrics could eventually provide an additional layer of security for mobile commerce, applications, and financial transactions, but that did not mean fingerprints would replace technologies such as NFC or other methods used to initiate payments.
The AuthenTec acquisition instead demonstrated Apple’s growing focus on securing its mobile ecosystem. Establishing reliable biometric security before expanding more aggressively into payments could strengthen consumer confidence and give Apple greater leverage when working with banks, payment networks, merchants, and other industry participants.
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