Skift Take

Apple just did it again. NFC-based Apple Pay is a game changer.

Apple just made tap-and-go near field communication (NFC) as sexy and cool as its devices, and saved the technology from disappearing into a technical abyss by making it a key feature of its new phone and watch products.

Until Apple’s announcement of its new NFC-based Apple Pay feature, NFC technology was on the fence in airports and on airplanes. As Ilia Kostov, EVP Global Sales and Product Strategy for GuestLogix explains:

“NFC was not widely supported because a major smartphone player hadn’t supported it. Now, with both Apple and Samsung using NFC technology it has become relevant and important, as much for travel companies as for retailers. The promise of NFC is really big, smart cards [credit cards embedded with NFC] are popular and convenient. Similarly, we expect NFC payment by smartphone to become more widely used, because it is a more secure and convenient method of payment.”

Despite some hesitating to adopt until the future of NFC was clear, GuestLogix had taken the initiative to equip its terminals to communicate with NFC devices. “We have been anticipating for a couple of years to support NFC,” Kostov tells Skift. “our terminals are NFC-ready and have been since 2012.”

Kostov shares figures from a new forecast by IDATE, which put the scope of NFC use in perspective. “Twenty-eight million consumers will use their NFC phone to make a mobile payment in 2014 and the value of transactions conducted via NFC will rise from an estimated $5.9 billion in 2014 to $69.5 billion in 2018. Some 278 million NFC phones will be in use in 2014, up from 146 million in 2013. By 2018, the number of NFC phones in circulation is expected to reach 1.9 billion.”

NCR, which supports payments at duty-free shops and also provides special terminals to book travel services and purchase tickets to events at the airport, also celebrated the Apple NFC adoption.

“With Apple Pay, Apple has transformed mobile payments and will have an impact on the industry like never before,” said Jimmy Fortuna, Vice President of Product Development and Chief Technology Officer, NCR Hospitality. “We are thrilled to be working closely with Apple to help Retail and Hospitality customers integrate this new method of payment into their operations, providing an easy, safe and secure way to pay with a single touch.”

Jim Peters, CTO at SITA, candidly tells Skift: “Apple pulled NFC off the cliff.” As Peters sees it, one of the best features of the Apple tap and go NFC interface is the integration with the biometric features of the new iPhone 6 and 6 Plus. “There is the thumbprint verification, so we may be able to work around ID issues for processes like boarding, where passengers are pre-verified by the device.”

The industry expects the new Apple phones and Apple Watch to play a large part in streamlining the air travel experience. SITA is ready to go on systems integration, Peters tells Skift, as soon as it has the necessary details from Apple. “We’re waiting for the developer kit API, and don’t know yet how the API will have access to Passbook, but we expect that passengers can board with tap and go, and thumbprint,” Peters said, telling us the SITA Lab expects access to the API very soon.

Peters points out that the Apple contribution is important, but that it is still a multi-platform world. “There are hundreds of millions of iPhones,” he says. “How many of those people will acquire the Apple Watch we could not say, perhaps 10% of those who have iPhones. The mass middle will use alternative technologies.”

The biometric verification also helps make payments on NFC secure, Kostov says, but what matters most is that NFC can now be considered a standard. The challenge now, is that Apple has positioned itself to compete with credit card companies, charging a fee to banks for using the tap and go NFC on their devices to transact payments.

Kostov believes Apple had to find a way to monetise the feature and doesn’t believe we’ll have to wait very long for this to be resolved. “We’re waiting to see how it all works out between the banks, Apple and merchants,” Kostov says. “Given how much attention it has garnered, they’re going to work it out.” Kostov believes there is room in the market for all NFC transaction options. “Smart cards may not go away entirely for a long time. We’ll still have card payments and smartphone payments. Consider that people still write checks, though they have largely disappeared.”


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Tags: apple, in-flight, nfc, technology

Photo credit: The NFC-based Apple Pay making a transaction. Apple

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