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Inside Apple's secret plan to kill the cash register.

All the major mobile platform companies, including Apple, are working on solutions for "contactless payments" and digital wallets -- the use of a phone as a credit card. Google's Android supports NFC, or near-field communication. Google Wallet enables payments from phones.

Everyone has been waiting for Apple to catch up. The company has a pile of patents that reference a mobile digital wallet service called "iWallet."

An analyst this week predicted something shocking: Instead of (or in addition to) adding NFC to future iPhones, Apple will use Bluetooth 4.0 for iWallet.

One stunning fact about this prediction is that the wireless hardware has already been deployed at scale. Every major product Apple has shipped in the past year, including the iPhone and iPad, supports Bluetooth 4.0.

All Apple needs to do to make iWallet a reality is ship an app.

Another stunning fact is that Bluetooth 4.0 has a range of over 160 feet. That means participating retail stores can function like Apple Stores -- without cash registers. The point of sale can be anywhere in the store. Restaurant diners can pay from the table -- without the waiter being involved.

I think Apple wants to kill the cash register. Here's why they might succeed.
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Apple is waiting for everyone else to try and stumble. Then they will unleash their version and make it look like they were geniuses. Bluetooth, very good thought. 
Alex M
+Shannon Melton Success is built upon failures - even better when you build upon others' failures.
Not surprising, although with the seemingly endless hack threats out there in a cash filled society I'm not sure a cashless society is a good idea at this time.... I see far too many vulnerabilities as it stands now if you were to completely change to digital money I think those problems would exponentially grow....
S Dayal
I guess this machine can still be used in the countries where there is no electricity. Some marketing may be required.
I actually like the idea but I think it has too many vulnerabilities right now to be used exclusively.... it's unscrupulous people that stop this kind of evolution sad as that is, it's true....
I'm holding out for gold-pressed latinum. ;)
A really smart business often improves on existing ideas, and markets them well, rather than expending resources coming up with totally new ideas.

Call it what you will, but it makes sense.
I can hardly wait until someone sets up digital toll roads to charge you for walking past their apartment.
For either of these technology (NFC or Bluetooth 4.0) to become successful, retailers, merchants, and consumers will have to buy in and participate at a level that renders it ubiquitous. Currently there are a few contactless options available that I encounter that are limited enough that I can't participate (MC vs. Visa, for instance). And I'm an early adopter. It will definitely be interesting to see which technologies the banks and merchants gravitate toward...

On the other hand....the other day a guy asked me for money on the street. I reached in my pocket and: nothing. As we move away from cash (I almost never carry cash) who will develop a way to transfer micro-payments to panhandlers etc.?
Whichever process they come up with, there needs to be a standard among all the companies. I can just imagine going to Target and they only accept Apple's payment or going to Kohl's and they only accept Google while Wal-Mart has their own.
MasterCard has already bought into NFC. Apple is not going to be able to just roll up and deploy there own solution that will work primarily only on there devices. Apple will need to get on the NFC band wagon and incorporate themselves into existing infrastructure. Doesn't anyone remember AppleTalk. AppleTalk was going to replace TCP/IP. It never did.
I can't believe i like this antique stuff. it looks so cool!!!!
Bluetooth is easily intercepted, with a 160 foot range it'll be dead simple for someone with the know how to start grabbing people's sensitive info en-masse by setting up camp near any major location where these would be used. NFC has a comparatively tiny range of several inches and it still gets flack for security, so something like BT with a thousands times higher range would be down-right ugly.

I agree with some of the concern above, the methode used for mobile payments MUST be ubiquitous, whatever the technology might be. I'm not interested in being forced into one ecosystem just so I can go buy my groceries!
Wow- brings me back to the days of working in the candy depth. at McCorys
depth store in the 70's
Except for the education discount buying my mbp at the apple store was as bad as shopping at circuit city

The genius bar rocks, the rest of the store sucks
A wooden case? REVOLUTIONARY!
How will store clerks know that you have paid when you walk out of the door with some of their merchandise? Will they ask you for your electronic receipt? They can't do that with everyone. That seems like a problem to solve first.
When NFC was announced my main gripe was why not just reswing Bluetooth
I prefer the added security of NFC being short range
What's stopping you from turning caps lock off?
+Skoti Brendel It would have to be one hell of a signal booster to even be able to get close to the person. On top of that for Google Wallet you have to enter your pin when a connection is initiated.
And with an Android phone at least you get something similar when; pairing Bluetooth devices you don't know
NFC is extremely short range. You usually have to be within 1/2 of an inch of the reader. That also means that your signal booster is going to be too strong for you to just set on a table inconspicuously at a place that accepts payments. On top of that you don't actually get the real card number. You get an authorization string that authorizes one transaction on the server side. They thought of hackers before they built it.
i've been waiting eagerly for this; already carry iPhone everywhere I go.
It is interesting that you say iWallet users wouldn't have to go anywhere near a checkout counter to pay. While I understand the Bluetooth 4.0 distance possibilities, I don't believe it would be efficient for retailers to send cashiers out into the store, wandering around in case someone wants to pay. There are a couple of reasons cash registers are near the door and have lines. The first is efficient use of employees. You need fewer when you have people queue up for you. The next is that a shopper doesn't pass more items for sale after they pass the check stand. This means less shrink (theft). It's quite easy to do something like this in a "demo / show room" environment where the product for sale isn't actually available on the shelf (only the tethered down demo unit is). However try to do it in a Wal-Mart or the like where the people put product into their cart and it will be less efficient and cause more theft. Imagine going out the door there with an email receipt (and a bunch of extra stuff in your cart). We've got a ways to go with "RFID everywhere" so that the items can be scanned easily and automatically before we could do this iWallet thing in a major retail store with no check stand. (It would work fine for just payment at a check stand though - these comments are only about the idea you espouse of the customer not having to go near the check stand).
Not just Apple wants to do this. So does Google and every phone carrier. I don't think it's necessarily a bad thing. It's just the natural evolution and progression of technology. Cheers to the future!
Its funny how technology develops so fast, if they do succeed in this, which I am sure they will, It will benefit everyone.
+Michael Frost had it right, people already have a ton of security concerns about NFC (though they shouldn't) and that only transmits an inch or so! Longer range is bad for mobile payment systems!
And people are worried that Google has too much power/control? What happens when Apple becomes your credit card company too?
+Mike Elgan -- So you're basically turning a cloud wallet into a "far field" wallet using a proprietary technology available only to iPhone users?

That's actually a combination of the worst attributes of NFC wallets (e.g. Google and Isis) and the worst attributes of cloud wallets (e.g. PayPal, MasterCard, Visa). In effect it's a technology shift for merchants, which is their biggest concern about NFC, married to a shortened range for consumers. (Why force me to be 160 feet from a merchant?) The benefit of the line-busting built into a cloud wallet is that I can order from my couch. Why must I wait until I'm within 160 feet of the store to enter my credentials and finish my transaction?

Throw in the "pairing" required with Bluetooth (NFC is automatic and passive) plus the security issues (both real and perceived) plus the EMV liability shift merchants are dealing with and you want to push a new standard based solely on the idea that it's Apple and a lot of people carry iPhones. I don't see many merchants (who have already been underwhelmed by the marvels of mobile payments at the point of sale) jumping on board, especially when there are already other options being pushed by companies that know a lot more about payments than Apple.

(That's not to say I don't want to see Apple coming out with something cool in mobile payments. From a professional standpoint, as someone who writes about mobile payments, I'd love it. But if I were to make a bet I'd say their future lies with NFC.)
The sooner all payments are done the contactless way the better as far as I am concerned. I am still amazed we carry cash around in the year 2012.
Um...Google wallet. A little behind apple.
Security check point at the door, similar to the "greeters" at Costco or Wal-mart could solve the receipt problem. If properly combined with technology & pin or other personalized security measures, it could be interesting... The difference from something like AppleTalk would be Apple's position in the mobile market now vs. their position in the pc market then. Intriguing article, and good to see that Apple may help improve the user experience in yet another area of our lives...
Probably in the minority here, but I am all for doing away with cash and moving exclusively to electronic transactions.

Yes, every transaction would be monitored, but then everyone would pay their fair share of taxes.

I get so frustrated when I go to my local garage or have a contractor do some work around the house and have them tell me there are two different prices - one for cash and one for credit or check. What that tells me is that when I pay them cash they are willing to extend a discount to me because they have no plans on claiming the transaction as income and therefore will not be paying taxes on the income they are getting from me. Call me crazy but when this happens, I intentionally pay by credit card ( the higher rate) so they have to claim it as income and pay taxes too.

I love the sign in one retail establishment that state something to the effect of "we do not charge sales tax, we collect it."

I work in the public sector, which means every penny I make is taxed, as the law requires. Why should only some of the people pay taxes all of the time?

If everyone paid their fair share of taxes, we would have no deficit and no debt. Our federal, state and local governments would have enough money to operate and maybe those that pay their fair share of taxes would not always be facing tax increases. 
First, remember than the fastest-growing cash register system right now is the iPad with Square. (I believe this is true, anyway.)

Second, Apple's solution will be trivially easy to ADD to existing cash register systems. As I said in the piece, this makes iPhone users the new "business class" -- no waiting in line.
There would have to be an alternative system for people like me who will not have anything to do with I-whatevers. Including ITunes.
Me gusta esta fotografía, me trae recuerdos que, aunque no los he vivido, me agradan, gracias Señor Mike...
digital 'money'... great for the trees but I hope it comes with 'sun screen'. ;)
As has been stated before here, who wants 160ft range for anyone to access their wallet? That's crazy talk right there! NFC is the by far better way with only an inch or two of travel. Plus Bluetooth is a huge battery eater when its not paired and constantly seeking for devices. NFC uses zero battery and the pairing system works quickly, make that, near instant! Apple can wish all they want with this that it'll get adopted, but I think that range is a huge security risk for hackers! Bluetooth is one of the easiest ways to hack into someone's phone especially if its left on all the time which is what is going to happen with this paying system as a convenience factor.
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