Further to my Observer column yesterday, this from Bloomberg.
Apple Inc. (AAPL) will reap fees from banks when consumers use an iPhone in place of credit and debit cards for purchases, a deal that gives the handset maker a cut of the growing market for mobile payments, according to three people with knowledge of the arrangement.
That’s a small cut on millions of daily transactions. Adds up to a formidable revenue stream.
You know what a learning experience is? A learning experience is one of those things that says, “You know that thing you just did? Don’t do that.”
Douglas Adams in The Salmon of Doubt
This morning’s Observer column
In the long view of history, though, the innovation that may be seen as really significant is Apple Pay – an ingenious blend of contactless payment technology with security features that are baked into the new iPhones. Apple Pay will, burbled Tim Cook, “forever change the way all of us buy things… it’s what makes the iPhone 6 the biggest advancement in the history of iPhones”.
The idea is to do away with the rigmarole of having to pull out a credit/debit card, insert in a store’s card reader, type a pin, etc. Instead, you simply bump your iPhone (and, eventually, your Apple Watch) against the store’s contactless reader and – bingo! – you’ve paid, and the store never gets to see your card. Why? Because Apple has stored the card details in heavily encrypted form on your device and assigned each card a unique, device-specific number, which is accepted by the retailer’s contactless reader.
This only works, of course, if the retailer has already signed up with Apple. Cook claimed that 220,000 US retailers have already opted in to the system, as well as six major banks, plus MasterCard, Visa and American Express – which means that 83% of all US credit card payment volume can theoretically already be handled by Apple Pay.
If true, this is a really big deal, because it puts Apple at the heart of an unimaginable volume of financial transactions. In a way, the company is now doing to the card payment business what it did to the music business with the iTunes store…
A fellow-guest at my hotel near Frankfurt.
Interesting snippet in the latest newsletter from the Open Rights Group:
It was revealed last week that the Met police accessed the telephone records of The Sun’s Political Editor, Tom Newton Dunn, using a RIPA request.
The case should end any discussion about whether or not metadata reveals anything personal about us: Newton Dunn’s calls and when and where they were received, were seen as enough to identify a whistleblower, who contacted him over the Plebgate scandal.
Journalistic privilege, protected by the Police and Criminal Evidence Act, was circumvented by the use of RIPA. Newton Dunn was not even aware that his records had been accessed until the Met published their report into the Plebgate affair.
When DRIP was announced, Newton Dunn wrote in The Sun, that the new powers would give MI5 and cops, “crucial access to plotters’ mobile phone records”. UK public authorities use RIPA over 500,000 a year to access private data. The police refused to answer questions as to how many times they have have accessed journalists’ data. When this is happening without our knowledge, we cannot ignore the threat to our civil liberties that data retention poses.
The interesting bit is the fact that the metadata were sufficient to identify a whistleblower. We all knew that, of course, but the official line is still that bulk collection of metadata does not infringe on privacy.
Lovely piece by David Frum in The Atlantic.
We don’t really have a plan. We don’t have a definition of success. We see some evildoers and we’re going to whack them. They deserve it, don’t they?
And sure, ISIS does deserve it. The group is a nasty collection of slavers, rapists, thieves, throat-slitters, and all-around psychopaths. The trouble is: so are the people fighting ISIS, the regimes in Tehran and Damascus that will reap the benefits of the war the president just announced. They may be less irrational and unpredictable than ISIS. But if anything, America’s new unspoken allies in the anti-ISIS war actually represent a greater “challenge to international order” and a more significant “threat to America’s core interests” than the vicious characters the United States will soon drop bombs on.
The question before the nation is, “What is the benefit of this war to America and to Americans?”
Which is a purely rhetorical question, left unanswered.
Terrific video I haven’t seen before. Thanks to Dave Winer for the link.
The moment I saw Tim Cook introduce Apple Pay I thought: this is the big deal. Reassuring to learn that Dave Winer thought so too:
The way we pay for stuff today is as archaic as the way we bought music before Napster and the iPod. A few years ago, it was clear that all the big tech companies were going to become banks. What else could they possibly do with the piles of cash they were accumulating? They’re going to lend it to us, and we’re going to pay them interest. Over time, the fact that they make hardware or support customers, or have retail stores, will be interesting anachronistic sidelines. Apple, Amazon and Google investors will judge their companies on how well they work as financial institutions. It’s something investors understand, and the money you make in finance comes without the headaches of having to actually make anything.
Apple has hundreds of millions of credit card numbers, and they’ll be useful until they completely replace the banks. Apple is bigger than any of them, and has bank-sized financial resources. And the way we pay for stuff today with little plastic cards, some with chips on them, is backwards. The chips in our phones are much more capable. And putting them on our wrist in a big form factor isn’t interesting. They will be embedded in our keychain next, and then in our actual bodies. It won’t be much longer before we are at least part computer.
Anyway, Apple will be a much better bank than BofA, Citibank or Chase. Consumers will have more rights from Apple than we were given by the bankers and their Washington cronies. Apple still is a fucked up mega-corporation, but they don’t have any reason not to treat us a little better than the guys they’re replacing. It’ll make for the feel-good Christmas commercial, this year and every year from now on.
Apple is simply doing the obvious thing: following the money.
“There is no harm in being sometimes wrong; especially if one is promptly found out.”
John Maynard Keynes
Amen to that.