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Apple's iBeacon turns location sensing inside out

John Cox | Feb. 11, 2014
'Where am I?' becomes 'Here I am!' with Apple iBeacon technology.

Mobile payments, says Chen, is a "multi-sided network problem." And it's ultimately all about one thing. "It's all about managing risk," he says. "People are taking a risk in moving money around." Everyone involved consumer, retailer, bankers, payment network vendors, all need to feel "comfortable" and secure, he says.

With beacons, merchants can communicate with a mobile device, launching a process that creates a secure handshake with the device, and authenticates the user. Unlike NFC, which requires the phone and reader to be touching or nearly touching, BLE lets this take place over a much greater distance, without the need for buying an NFC-equipped phone or adding NFC readers at the point of sale.

Ganga speculates that Apple can use its existing data about who you are— your Apple ID, your registered iOS device and credit card data — and combine it with in-store data about where you are, in order to facilitate mobile payments.

"Apple knows who you are," he says. "If you're at Walmart, the store knows [via iBeacon] where you are. You already have an Apple account, with a credit card. If you're buying clothes at Walmart, you can use this existing infrastructure as a payment conduit. Apple doesn't need to re-invent the wheel."

There are plenty of challenges. Already privacy advocates are raising fears about the kind of data retailers and others might collect, and how they might use that data. Beacon infrastructures are so new, there are a range of potential vulnerabilities, according to Ty Rollin, CTO for Mobiquity, a mobile solutions firm. He has a recent blogpost on the results a series of tests the company ran to assess beacon weakpoints.

They include: lack of management and visibility into the beacons themselves; some beacons may be vulnerable to spoofing or cloning; too many beacons can interfere with each other; consumers could end up coping with a barrage of signals, and messages, and quickly classify all of them as "spam."

All the iBeacon experimentation and predictions can't hide the ultimate risk for retailers who try to exploit the technology.

"If you alienate a customer, it's very, very hard to get them back," says DMI's Ganga.

 

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