Payments

Apple introducing iBeacons what does it mean to Mobile Payments & Offers industry

U.S. BankDigital Product Leader

What is Apple’s new iBeacon ?

Is iBeacon just a solution for in-store marketing ?

Tons of questions are swirling around the new Apple iBeacon and its usage. Will iBeacon require merchants to add a new Bluetooth broadcast device in their store? Is it more of an indoor mapping, microlocation-based context aware senso ? Will merchants buy, update and  integrate their software with iBeacon?Will iBeacon become a mobile offers spamming technology, in essence breaking all consumer privacy?

Apple’s iBeacon works on Low Energy Bluetooth (BLE), also called Bluetooth 4.0 and  Bluetooth Smart. It is a ubiquitous wireless sensor beacon that records a user’s location, activity, and duration of time spent. at a particular location. It can record such minutia as which aisle a shopper spends the most time. Users would be pushed personalised in-store offers and personalized welcome messages So advanced, itcould enable payments at the point of sale (POS) without the user removing his or her wallet or credit card. It could be possible a Near Field Communication (NFC) competitor. It would be interesting to see how merchants/retailers react to this new technology upgrade & technology investment that will go behind iBeacon.

See also…Apple’s First iBeacon Location Made Public 

Considering the current landscape, MCX is planning to move ahead with QR/Barcode based mobile payments, they already upgraded to NFC enabled POS whose usage has not picked up yet in the market. Introduction of iBeacon is a new set of software & new hardware addition & integration. This may lead to confusion among the customers as well as retailers to know which payment technology to use. Consumers will be confused which customer has iBeacon, NFC, Paypal, Google Wallet, QR Code, Barcode. Rather we might see consumers stick to their credit card to avoid confusion on all these technologies. Also, this might increase time to process a transaction at point-of-sale.

Since BLE is a low energy technology it may face lot of challenges, such as data transmission rate, streaming might not be possible, security still remains an unclear subject, how would it manage broadcasting offers information on mass scale when in-store traffic is at its peak.

Few Companies providing solutions:

It would be interesting to see how iPhone is going to sustain with device battery life. There are some basic differences between iBeacon Bluetooth technology vs NFC.

  • iBeacon range is 50 meters vs NFC is 20 cm (NFC was always designed to be used as a payment solution & not as indoor navigation)
  • iBeacon is Bluetooth technology which is inbuilt in pretty much 100% of smartphone devices vs NFC is an additional chip to be added on mobile device. which yet many phones don’t have it. Basically, iBeacon is ZERO cost from consumer perspective & adoption could be higher if implemented correctly vs NFC would be gradual based on consumers buying new technology.
  • iBeacon is not yet clear on HOW could it enable payments on POS vs NFC is designed to enable mobile payments at POS.

Overall, iBeacon is new and looks promising, few pilots of practical implementation and data around it would be helpful to conclude how, why, when, where, what price, would be viable to implement this technology & how consumers adoption rate is. Will it support mobile payments the answer to that question is still unknown & there are lot of speculations around it. At times comparing NFC with iBeacon I feel is not a ‘apple to apple’ comparison. Many questions & challenges will surface since PayPal is looking to release some iBeacon supported products in 2014.

More soon on Apple introducing iBeacons what does it mean to Mobile Payments. Stay tuned for more payment news, analysis and startup stories on Lets Talk Payments.

Aalok Jariwala

U.S. BankDigital Product Leader

Aalok Jariwala - Product Manager, Mobile Payments/Offers/Banking, , Aalok brings with him entrepreneurial aspiration & acumen with his extensive experience in area of Mobile Banking, Payments & Offers (branchless banking in emerging countries). Currently, Aalok holds product manager position at U.S.Bank. Prior to U.S. Bank, Aalok worked as Director of Product & Sols at SourceTrace Systems for branchless mobile banking/payments solutions heading south east Asia products. Aalok hold™s Master of Science degree in Computer Science from San Jose State University, a post-graduate degree in Computer Engineering, a diploma in Business Management and a diploma in Mechanical Engineering.

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