iPhone 5S Will Turn Your Fingertip Into a Credit Card

Will Apple's latest smartphone bring so-called biometrics into the mainstream?

  • Share
  • Read Later

Passwords are played out, according to Apple. The company is touting a fingerprint scanning system, dubbed Touch ID, as one of the most prominent new features of its upcoming iPhone 5S. Touch ID will boost phone security, Apple says, by allowing people to unlock their phones with a fingerprint instead of a 4-digit PIN. But it has another purpose too—making it easier for all of us to to buy more stuff, faster, on the iTunes and App stores.

While browsing Apple-owned digital stores, iPhone 5S users will be able to purchase items with a simple press of the home button instead of entering their Apple ID password. The feature is first step to a world where our bodies can be used to confirm purchases instead of a string of letters and numbers.

“We think it’s an interesting approach to e-commerce and distinctly different from what several other players in the market are trying to do,” says Bill Kreher, an Apple analyst at Edward Jones. “Using iTunes as a starting point is an excellent proof of concept and could lead to outside apps being able to use the technology.”

(MORE: 4 Reasons You Need the iPhone 5S and 5 Reasons You Don’t)

People are getting ever more comfortable with the idea of buying things directly from their smartphones. About 75% of smartphone users now buy or compare products via mobile, according to eMarketer, and that group will spend almost $15 billion in mobile commerce this year. By 2017 eMarketer projects that people will be spending $30 billion buying stuff from their phones.

Apple, which generated almost $4 billion in revenue from its digital stores in the last quarter alone, wants to make the transition to mobile shopping as seamless as possible. The simplicity of Touch ID could help make that happen. “It’s highly portable, it’s unique, it’s not difficult to memorize, it follows you wherever you go,” says Norman Sadeh, the director of the Mobile Commerce Lab at Carnegie Mellon University . “If the technology works, people will adopt it.”

A fingerprint scanner alone doesn’t alleviate worries about digital security, though. “There are techniques out there for lifting and duplicating fingerprints,” says Marc Rogers, the principal security researcher for mobile security firm Lookout. “A fingerprint is something you inadvertently expose all the time when you touch things. There’s always the potential for someone to copy it, and that’s less likely than something you remember.”

Rogers says a two-step authentication process, involving a fingerprint and a PIN or password, would be the best way to handle financial transactions. Apple’s implementation replaces entering a password with a fingerprint scan, even when buying products in the App Store. But unlike most data Apple collects, users’ fingerprints will not reside in the cloud. The company says fingerprint data will only exist on a specific iPhone’s internal hardware.

For now, other apps won’t be able to make use of Touch ID, but Apple may later open up its use to other developers. Even if it doesn’t, phone manufacturers have a tendency to follow Apple’s lead when it comes to implementing new features—think about how Siri spawned a host of other personal voice assistants from rivals like Samsung and Google. There have actually been other smartphones with fingerprint scanners on the market before, but none have found great success.

(MORE: Tokyo Man Already in Line for New Apple iPhone 5S)

Other companies are working on alternate methods to make mobile commerce more seamless. PayPal just overhauled its mobile app to allow people to pay restaurant bills via smartphone. Facebook is testing a system that would allow users to make purchases in apps by logging into their social media accounts. Meanwhile companies like Square and and Google are vying to bring mobile commerce into the real world by releasing apps that let people make in-store purchases with their smartphones. So far, biometrics like fingerprint scanners haven’t played a big role in e-commerce, but they’re gaining prominence as a digital authorization method. Scientists are devising ways for users to authorize actions with their fingerprints, their heartbeats and even their thoughts. With a company as influential as Apple adopting biometrics, their use is likely to grow more widespread.

“We’ve seen Apple take technology from relatively unknown position to being mainstream literally overnight,” Rogers says. “I think it has the potential for being huge.”

SEE ALSO:  The Big Surprise of Martin Luther King’s Speech