I agree with the security concerns and think that NFC is stillborn due to its design.  I already have a single factor credential - cash, which is more secure than NFC as no one can access it other than in its physical form.  I see NFC solely as a convenience for the user at the expense of security.

Living in the skimming haven of Miami where there are streets that credit card companies do not allow use of their cards for gas because of the amount of skimming losses they have taken, I appreciate more secure methods of payment.

Not having NFC is a checkmark on the plus side for me, as I am one of those guys that turns off Bluetooth and restricts access to any "cloud" type services as much as possible.

I agree that security is an unknown, and Apple doesn't want to dive into a area that might explode in their face. Smartphone hacking is picking up, and making the devices even MORE hack-worthy (i.e. the NFC/mobile wallet) needs to wait until security/identification is 100% effective and (especially for Apple) easy to use/user friendly.

I think you're onto an important point here.  Apple may be holding back in part because of security issues.  Once any standard takes off, it will be a big target for bad guys, and not just the ones who "find" phones.  i have maintained for some time that payment systems will only look secure enough to replace a large fraction of transactions when you can offer 2-factor authentication (device + shared secret, i.e. password or equivalent) as the default, and 3-factor (adding bio ID) as a requirement for larger transactions or as an option for customers to protect themselves on smaller transactions.  The latter will require a fingerprint reader or retina scan on the phone.  NFC doesn't solve 2- or 3-factor auth.  It's just a more convenient way to present your single-factor credential (i.e. the device).  People love to talk about "wave and go" transactions, but let's face it, those will need to be restricted to a modest number of very small transactions per day.

More broadly, I believe Apple has not yet worked out how to ensure that the overall user experience of mobile payments, including security, is Apple-worthy.  To achieve that, they will need to have a strong role in the mobile payments ecosystem, which likely puts them in competition with a lot of other players.  And of course, that could be more profitable for them as well.  Maybe they could get a cut of the processing fees, or maybe they even see the opportunity to become a bank and disrupt yet another industry.  But doing those things is way harder than just throwing a chip in a phone.

Surveys suggest that more than 20% of mobile phone users have either lost their phone or had it stolen at some point. That is a huge revenue opportunity for the bad guys.

I guess I don't understand why its wonderful to have a card that can be stolen (and acts like cash) or a phone to be hacked to pay my bills wirelessly by waving them at a machine.  Imagine a hacked POS device.

I just think both are just so likely to add to theft that before we get convenience happy that we need to think through the security aspects.

seven

I think we're in agreement that Apple isn't the trailblazer, but it is the company that takes a lot of technologies mainstream. My point was that it could've done the same for NFC. I don't blame them for not including it given the current state of the market, but I maintain that it's disappointing for the ecosystem because it could've kickstarted it.

I'm not convinced about NFC in phones for payments. The new Visa cards in UK have a thing called contactless payment. You touch your card to a machine and pay for goods without entering a PIN.

It some ways it seems better than using a phone to do the same thing. Maybe a phone would be more secure (if you set a password?).

It looks like this:

As Soup says, Apple is very leery of cutting edge.  Gorilla glass and LTE are notable.

BTW, I think you should look at it this way: if Apple backs something, then it becomes popular.  If Apple doesn't back something, it just means it is holding back until it can make itself look good doing it.

-desi

Its too early to make the call on NFC.

You have to dive below the hype Sarah and see the wood not the trees. Your articles are usually informative and balanced, so I am going to put this 1 down to a low "starbucks" day.

Apple has never been a edgy innovator. They would like to sell you that story and if you buy that narrative then they are very happy! Reality is that they adopt a fast follower with a focused USP around user experience.

I think they dont know what standard will win and are not in the gambling mood, because the judgement call between teh competing systems is too close to call.

Can they create themselves a standard? Yep.

Are the confident they can lead on the UE? No.

They're going to need something new for the iPhone 6...