Best of all, a solution like this can be implemented largely via software, as long as a merchant's cash registers have a screen that can display barcodes--as most do. This means lower adoption costs, and a better chance to quickly react to potential flaws by fixing them with an update to their system that can be installed remotely.
Relying primarily on software also means that the inevitable flaws can be addressed in a more timely manner, since they do not require the replacement of physical devices: New versions of apps for both the end user and the retailer can be deployed in a matter of days using existing infrastructure like the App Store, instead of relying on costly swaps or mailing out of new cards.
A safe in your pocket
This model could easily be extended—virtually unchanged—to online transactions, reducing the requirement for customers to leave their credit card numbers in the hands of merchants who often have a hard time keeping them secure, despite their best intentions, and greatly increasing the safety of Web shopping for everyone involved with minimal investment.
In this case, instead of asking for your card information, your favorite website could, once again, show you a barcode that you could scan with your phone; you could then authorize your purchase just like at your local store. If you happen to be shopping on a mobile device, of course, this process would be even simpler—a link on the check-out page could just launch your dedicated "electronic wallet" software and allow you to complete the purchase more quickly.
Why involve mobile devices at all when you could be running the software directly on your computer? Because they are inherently more secure. Apple's institutional paranoia, with its sandboxing and app store limitations, in particular, is going to make iPhones and iPads prime candidates for this kind of service, since—as long as they are not jailbroken—iOS devices make it easy to run software that is resistant to data theft.
Mobile devices are also becoming the primary conduit through which new technology makes its way into the lives of most people. Few computer owners would bother installing a fingerprint sensor on their Macs and PCs, and yet tens of millions of people already use one every day just because the iPhone 5s comes with one. Against all odds, users of smartphones and tablets—devices built with less technical folks in mind—are becoming the early adopters of our time.
All this points to mobile devices in general (and iOS hardware in particular) as the perfect choice to upend the payment industry. All the pieces are in place, and the only thing missing is a player that has both the capabilities and the clout to push a solution on the industry—a role that would fit Apple to a tee, but that could also open the door for smaller players to bring innovative solutions to the forefront.
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