Apple's AuthenTec Acquisition Does NOT Mean Payments

by Mercator Advisory Group 0

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.

Click here to read more from Mobile Commerce Daily.