Wireless payments market facing more disruption

Wireless payments market facing more disruption

When the emerging market for wireless payments is discussed, it is usually in terms of NFC (near-field communication) -enabled smartphones or in terms of apps relating to specific companies' services such as Pay By Square and eBay's PayPal.

But while NFC requires an NFC-enabled smartphone and a similarly NFC-enabled payment terminal for purchases to take place, 100 percent of all smartphones and feature phones currently in production are capable of sending and receiving text messages.

From 2014, following clearance by the Payments Council, UK mobile phone owners will be able to transfer money using their phone number and a text message.

The new service will enable secure payments to be made directly to or from an account without the need to disclose the sort code and account number, by simply using a mobile phone number as a proxy. Eight financial institutions -- representing 90 percent of UK current accounts -- have already committed to offering the new service from spring 2014, with discussions continuing for more institutions to join.

While there are existing ways to pay using a mobile, the collaborative Payments Council project marks the first service with the potential to link up every bank account in UK country with a mobile number.

Meanwhile, the latest rumors surrounding potential features for the next iPhone include claims that the ‘home key' button will integrate a banking-encryption level fingerprint scanner for verifying identification and making payments. According to analyst Ming-Chi Kuo of KGI Securities, the addition would also enable Apple to do away with passwords and usernames while adding an extra layer of security to its handsets and operating system.

In October Apple signed a deal with Microlatch, an Australian biosecurity company, to help it develop fingerprint-based identification technology, signaling that it is about to take a significant step towards mobile payments and virtual wallets, while in August, the company bought AuthenTec, the Florida-based mobile and network security provider, and manufacturer of smart sensor fingerprint-reading technology. The deal upset many in the tech community including Samsung, HP and Dell which, until the acquisition, had been AuthenTec customers. They were informed in September that from 2013 the company would cease providing its products or services to third parties.

The next iPhone is expected to launch in June 2013.