September 10, 2014
The Long Journey Of Apple Pay
There will be a great deal written and to be said about Apple Pay. Many even astute experts will assume that Apple just took a year or so to build this new payment system. The truth be told it was a very long odyssey that spans almost a decade. It is also a masterful act of negotiation on Apple’s part to not disrupt, but to work with and not against all parties in the payment system ecosystem.
Yes, it has been a very long journey for Apple and payments. This journey started just a few months after the first iPhone 1 was announced. Apple took a slow and methodical approach to what will become a central feature of iOS devices moving forward. The first patent applications that were directly related to payments began to appear in 2008, they just did not seem obvious on to just a few weeks ago. One could even go to the days before Apple released the iPhone and see the foundation being constructed for finger print scanners and other security systems. Apple knew very early on that to have a mobile wallet it has to be highly secured. The results was TouchID and this was primarily established with the purchase of AuthenTec. The security was also extended into the very processor of the iOS device, the ARM processor. This was achieved through the use of the TrustZone/SecurCore ARM developed specifically to secure financial data. Apple took this framework and made it the foundation of the Secure Enclave.
Payment Card Breaches Changed Everything
The Target payment card breach was a huge turning point in the payment card industry. Up to this point all parties of the payments ecosystem had very little motivation to change the way they processed payment cards. The 1970’s era magnetic stripe was the primary system used in the US with dozens of startups for the last two decades spending billions of dollars to try to disrupt this system, all to no avail. But the Target breach was different, it was a huge number of cards, stolen from a top 5 retailer and it was getting the attention of government regulators. Thus in January 10th 2014 I asserted that the payment card companies would begin to support new technology that would assure the highest level of security. I presented it this way:
Apple’s Secure Enclave And Touch ID, Movie Entrance
Like the perfect set up in a movie, Apple has arrived with a fully encrypted wallet called the iPhone. The new iPhones use the Secure Enclave, iCloud Keychain and Touch ID to make the iPhone and Apple’s forthcoming iWallet a rather robust answer to many of these problems. By the end of 2014, we will see the almost decade of planning Apple did to become the first true, useful and secure mobile wallet ...