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Data: For a retailer, simply having an optical Human: One of the biggest reasons why Apple Pay
reader or an NFC payment terminal is not and Starbucks have been successful with mobile Chapter 4
sufficient to process CurrentC or Apple Pay payments has been their respective approaches
payments, because retailers also need interop to the human layer. While other mobile payment
at the data layer in order to work with any given systems are fairly complicated for the end users,
mobile payment system. For example, at the Apple Pay and the Starbucks app were engineered
technical layer, Apple Pay and Google Wallet could for simple set-up. For example, Apple Pay requires
work with any retailer payment reader that uses only that the user photograph an image of their
NFC. However, not all NFC readers can process card. Then, to use Apple Pay, the user simply holds
Apple Pay or Google Wallet data. In fact, retailers the device near an NFC terminal and activates the
associated with the CurrentC standard, including biometric fingerprint reader for verification. By
some of the largest retailers in the United States, contrast, as Figure 4.4 shows, setting up CurrentC
disabled the use of their NFC terminals in order to requires multiple steps including entering a
stymie NFC-based competitors. 13 passcode, checking account data, and other
identifying information.
Similarly, for a bank to interoperate with a mobile
payment platform, it needs more than technical Institutional: Many mobile payment systems
connections to the device. To increase transaction operate over the existing institutional credit
security, Apple Pay creates one-time-use secure card network that comprises the global payment
tokens that are transmitted to the bank instead of processing system. This system has already
credit card numbers. Using these tokens ensures established the norms and rules that help ensure
that if a retailer is hacked, any captured numbers that retailers and banks are fairly compensated.
are unusable for future transactions. However, One aspect of this system is the fee that retailers
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use of these one-time tokens requires that the must pay to the credit card companies to cover the
issuing banks be able to interpret these tokens and cost of the complex institutional network. These
match them back to a specific user account. so-called “swipe fees” average up to about 2 per
Figure 4.3: Apple patent diagram showing various components of Apple Pay system

Source: NFC World, http:// www. nfcworld. com/ 2014/ 01/ 16/ 327536/ apple- patent- combines- nfc- bluetooth- wifi- mobile- payments/

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