NFC + Mobile + Biometrics = The Future of Payments

British Banking Association reports on UK’s banking ‘revolution’ (NFC World)

“The revolution in the way we spend, move and manage our money is not over,” the report says. “Banks are looking at a range of new technologies to make banking even easier and more flexible. Biometric data could make accounts safer and security features more straight forward for legitimate transactions.

“Near field technology could end the need for taking your card out of your wallet or purse to make a purchase. Banks will strive to innovate because they know it’s a way to win new customers.”

The combination of mobile handheld device hardware (i.e. the perfect token), biometric ID verification, and NFC provides the tools for building extremely powerful ID management regimes.

Banks appear to be realizing that systems like these could make for happier customers and pose a real threat to the credit card/debit card/clearing house/merchant bank model of card-based payments provided by organizations such as Visa and Mastercard.

It’s possible that banks that successfully negotiate this opportunity could begin to take back some of the 3% of credit card transaction value (a massive amount of money) collected by credit card companies, but in order to do that banks will have to figure out how to make an extremely secure mobile app that that lives on a device that has a massive attack surface.

Elsewhere in the news, Norwegian start-up Zwipe is trying to solve this riddle with dedicated hardware. As compared to networked mobile devices such as smartphones, the Zwipe device has a tiny attack surface in that users can’t download viruses to it via cellular signals, wifi or SMS. But in the name of security, the Zwipe device lacks some of the connectivity attributes that make smart devices so attractive for true e-commerce transactions rather than “point-of-sale only” transactions.

No matter how all this shakes out, this is a trillion dollar riddle and biometrics are a near certainty to factor in the solution.

You got biometrics in my NFC!

SmartMetrics incorporates NFC into biometric chip card

“This will enable institutions to offer a safer NFC solution than that which is currently available since the NFC Biometric Card will only be turned on allowing NFC communication to be inactive until the user touches the cards fingerprint sensor,” Chaya Hendrick, SmartMetric President and CEO said. “All other NFC technologies are inherently unsafe in that the device is always on providing hackers the ability to capture the NFC information even while the NFC product is not being used. Smartphones are a good example of ‘unsafe’ NFC systems.”

Recent SEC Filings Reveal More on AuthenTecApple

Apple may put fingerprint scanners in future products (V3.co.uk)

Among the technologies Apple now owns is a type of fingerprint scanner designed for mobile products with Near Field Communication (NFC) built in. AuthenTec’s AES2750 product is a fingerprint scanner that can interact with NFC applications to offer a secure way to log in to various systems.

AuthenTec says the technology can lock and unlock a phone, authorise mobile banking transactions and replace website user names and passwords, all with a fingerprint scan.

SEC filing fans rumors of mobile wallet for iPhone 5 (COMPUTERWORLD)

But how quickly these elements are introduced depends on Apple’s long-range plans for iPhone, and iPad, as well as the maturing of the mobile payments industry infrastructure, a big jump in consumer acceptance and — most of all — trust in the new technology, and how quickly Apple can phase these particular technologies into its supply chain and manufacturing processes.

The fingerprint sensor, many speculate, will be a key part of a full-fledged mobile “digital wallet” using a near-field communication (NFC) radio link to trigger purchases by simply waving the handset over an NFC reader. AuthenTec, an established vendor of a range of smart sensors, identity management (including PC/laptop fingerprint sensors), and embedded security products, announced the deal on July 27. At $365 million, it’s Apple’s biggest buy.

It’s worth pointing out that Josh Franklin at Seeking Alpha predicted the broad outlines of this whole thing a couple of months ago.

NFC + Fingerprint Biometrics = Cha-ching?

Apple wanted AuthenTec’s “new technology” ASAP for future products (Ars Technica)

There’s a hint that, whatever the tech involved, we won’t have long to wait. According to AuthenTec’s account, Apple wanted to hurry the buyout deal due to its own plans. “Representatives of Apple also noted Apple’s desire to proceed quickly due to its product plans and ongoing engineering efforts,” reads the SEC filing. “As a result of its focus on timing, Apple’s representatives also informed the Company that Apple would not participate in an auction process and would rescind its proposal if the board decided to solicit alternative acquisition proposals for the Company.”

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