The bankers involved don't want to talk about it. But listen closely and read between the lines, and you can see why they might be willing to sacrifice some fees to participate in Apple's mobile payment platform.
Both options have been hamstrung by complications. Google Wallet worked only on specific phones, using specific cellular networks, and with specific credit card issuers. And paying with a phone has been no easier or more valuable than swiping a credit card at the register.
Apple Inc. (AAPL) will reap fees from banks when consumers use an iPhone in place of credit and debit cards for purchases, a deal that gives the handset maker a cut of the growing market for mobile payments
Al of this complexity is now buried. Apple has taken charge of the handset, the SE, the TSM, the API and the experience. Now, it all works.
But how does it all work? What's under the hood. Well, it's all to do with tokenisation, which is why Consult Hyperion's mad tokenisation skills have been much in demand.
The Apple service is enabled by a secure element embedded by Apple in the iPhone 6, iPhone 6 Plus and the Apple Watch and a payment tokenisation service provided by Visa. It will build on our other routes to market for issuers wanting to offer mobile commerce services to consumers, including cloud-based payments (serving consumers with NFC-enabled Android devices) and services offered through a secure element in a mobile SIM.
Payments via Apple Pay integrate with the MasterCard Digital Enablement Service (MDES). Announced last year, this service, provided by MasterCard to banks, allows a connected device to be used for everyday shopping and payments. In addition to the banks announced today by Apple, MasterCard is working with its partners to bring additional banks on board quickly through the MasterCard Digital Enablement Service.
Some others (uncharitable persons, of which I am not one) also suggest that banks will pratt about and muck this all up and hand digital identity verification to Apple, Facebook, Google, Amazon and Microsoft on a plate. AFGAM
The Norwegian implementation is follows my favourite SimID model: the service providers use virtual IDs (public key certificates), the mobile operator provides the digital identity (the key pair) and the bank binds the digital identity to the real person.