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Apple Could Make Mobile Payments AuthenTec

Sarah Thomas

1:20 PM -- Apple Inc. (Nasdaq: AAPL) revealed in a Securities and Exchange Commission (SEC) 8-K filing last week that it plans to acquire security vendor AuthenTec Inc. for $356 million.

Apple isn't outlining its intentions for the company, but the iPhone maker is likely eyeing mobile payments, a space in need of all the security it can get. (See Isis Taps Gemalto to Secure Tap-to-Pay .)

AuthenTec's fingerprint readers provide authentication that would make iPads and iPhones better suited for the enterprise market, but it'd also add much-needed security -- and peace of mind -- to the mobile payments space.

Assuming the next iPhone has a Near-Field Communications (NFC) chip on board, as rumored, that's a powerful proposition.

Services like Google Wallet have yet to gain much momentum, in part because of a perceived lack of security. It's one reason Verizon Wireless wouldn't preload the app on its smartphones. NFC on some Android and Nokia Corp. (NYSE: NOK) handsets has proved alarmingly easy to hack as well. That's a problem because if consumers have any doubts about how secure mobile payments are, they'll never feel compelled to swap out their plastic for their smartphones. (See Verizon Blocking Google Wallet? Poor Decision and How Secure Is Your Google Wallet?)

We do know that the next iPhone will feature iOS 6 and Passbook, Apple's mobile app for storing coupons, tickets and loyalty cards. NFC-powered mobile payments would round out this mWallet offering nicely. And, we can all likely agree that Apple, more so than a group of wireless operators, startup or software maker, has a track record of moving the market forward. (See Bank, Service Provider Fees Slow Mobile Payments, Euronews: DT Outlines Mobile Payments Plan, German Operators Team on Mobile Money and Mobile Money: What's the End Game? )

I suspect that the combo of security and Apple's innovation and marketing will have the same affect on the mobile payments market too.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

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12/5/2012 | 5:25:31 PM
re: Apple Could Make Mobile Payments AuthenTec

Security is definitely a hold-up for mobile payments, but I think it's also not taking off because using a credit card just isn't that hard. A mobile payments service will have to have other value-adds and be super-simple to use to be effective. Again, here, I think Apple has the best shot at building such a service with NFC and Passbook.

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