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Apple Pay, iBeacon, NFC, BLE: Making Sense of the Debate

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With the release of Apple Pay on both the iPhone 6 and iPhone 6+, the debate between NFC (Near Field Communication) and BLE (Bluetooth Low Energy) intensifies. If I lost you at NFC and BLE, good. You’ve come to the right place to learn more about both. The purpose of this post is to explain what Apple Pay and iBeacon are all about, so you can better understand the discussion surrounding NFC and BLE in the retail and mCommerce space.

What is Apple Pay?

Apple Pay is a smart wallet that allows users to pay for goods and services with their iPhone 6. Hold the iPhone 6’s fingerprint scanner and tap a contactless payment terminal at any one of the 220,000 stores accepting Apple Pay, to make your purchase. In short, Apple Pay is a one-touch payment process.


At this time, participating retailers include Macy’s, Bloomingdales, McDonalds, Nike, and Walgreens, to name a few. The list of retailers accepting Apple Pay is bound to grow as contactless terminals – the same ones you tap your plastic credit and debit cards on to pay – can be enabled for Apple Pay.

The one-touch payment solution is also available online, allowing users to expedite the payment process on mobile shopping sites and apps. Fill-out forms on checkout pages are a thing of the past with Apple Pay, as you no longer have to share your card details with online merchants. Just tap the Apple Pay logo on a participating website or app when you’re ready to buy. Apps like Uber are already showcasing Apple Pay’s potential, as the ride sharing app is now giving its users a way to pay for cabs without uploading their credit card information.


How does Apple Pay work?

Once you snap a picture of your credit or debit card with your iPhone 6, its issuing bank verifies it. The card is then added to your Passbook app, which has the ability to store all your payment and loyalty cards, among other redeemable items.

How secure is Apple Pay?

To ensure that neither Apple, or your iPhone 6, or even the merchants you transact with retain your card’s information, a few safeguards have been put in place. First, a device-only account number is used instead of your bankcard’s digits. Every time you make a purchase, a one-time payment number is issued in lieu of your payment card’s information. If your iPhone 6 is stolen, you can shut down all of its payment capabilities from another iOS device with Apple’s Find My iPhone app. Best of all, there will be no need to call your bank to cancel any cards you had on Passbook, as their details were never stored on your iPhone 6 to begin with.

There are two components to Apple Pay’s one-touch payment system. The first is the iPhone 6’s fingerprint scanner, which only authorizes the phone’s owner to use Apple Pay. The second is NFC (Near Field Communication), a short-range wireless technology built into the iPhone 6, allowing you to share information with other NFC-enabled devices, such as contactless payment terminals.

What else can NFC be used for?

Currently, Apple has limited the iPhone 6’s NFC chip to Apple Pay. However, NFC technology has other uses, such as the ability to read NFC tags. These tags are small, battery-less devices that look like thin labels and are made from flat microchips and antennas. When scanned by an NFC reader, like the iPhone 6, they transfer information, such as a website’s address, text or a command for an app. NFC tags can be placed on merchandise and around retail locations, offering shoppers more information about products, rebate coupons, direct links to a retailer’s app, or identify customers for a loyalty program.

The tags can also be used outside the retail environment. Check out this article to discover 18 creative and practical ways to use NFC tags.

What is iBeacon?

You’re walking towards the shoe aisle at Macy’s. A small wireless sensor, placed next to a pair of TOMS shoes, sends your iPhone a signal. This signal prompts your Macy’s app to display a message that reads, “30% off TOMS shoes today.” What a coincidence, you happen to love TOMS shoes and were browsing them on the Macy’s app last night. When you think the timing could not have been more convenient, you notice the discounted pair of TOMS’ 6 feet away. Was your proximity to the shoes a coincidence? Not really. It all happened thanks to Apple’s iBeacon technology.

How does iBeacon work?

iBeacon is Apple’s technological standard when communicating with beacons (aka the small wireless sensors), which are made separately by companies like Shopkick or Estimote. These 3rd party beacons have one purpose: emit a signal via BLE (Bluetooth low energy), a short-range wireless technology, to nearby Apple devices. In essence, iBeacon is Apple’s software and hardware standard which companies like Shopkick and Macy’s must follow, so their beacons and iOS apps can communicate. This way, if your iPhone, iPod, or even iPad is in proximity of a Shopkick beacon, and you have an app that supports iBeacon, you’ll receive targeted information about your surroundings.

To clarify our previous scenario, the Macy’s store is equipped with Shopkick beacons that are compatible with iBeacon technology. In addition, the Macy’s app on your iPhone supports iBeacon. Upon entering the Shopkick beacon’s proximity with your smartphone, its signal instructed the Macy’s app to share your approximate location and personal information with Macy’s servers. Macy’s servers then analyzed your in-store location and app’s browsing history, before sending you a relevant promotion. In this case, the TOMS shoes.

What else can iBeacon do?

Retailers can use iBeacon whenever there is an opportunity to enhance the customer’s in-store experience, by sending them targeted information relevant to their location. Whether it’s a promotion, in-door directions, or recommendations, iBeacon can offer context for an app-based experience on compatible Apple devices. Moreover, the recent iOS 8 update has fine-tuned iBeacon’s in-door mapping capabilities, as the technology can now approximate a user’s movements with more precision, allowing for useful directions inside a brick-and-mortar store.

Is iBeacon and NFC the same thing? Not really.

As you may remember, Apple Pay’s technology relies on NFC (Near Field Communication). NFC allows two-way communication and has a 20 cm range, but works best within 4 cm of a contactless payment terminal or an NFC tag.

iBeacon, on the other hand, is a technology proprietary to Apple that operates via BLE (Bluetooth Low Energy). It works through compatible iOS apps and wireless sensors known as beacons, which emit one-way signals to Apple devices within a 50-meter radius.

In short, Apple Pay and iBeacon are Apple technologies. NFC and BLE are the wireless means they respectively use to serve their intended purposes.

Can BLE technology and NFC be used for the same things?

The short answer is yes. This is precisely why there is a growing debate about BLE technology being an NFC killer. To assess their respective abilities, here’s a great infographic comparing how each one measures up.


What does this mean for retail and mCommerce?

It’s expected that roughly 70% of smartphones will be equipped with BLE and 50% will have NFC capabilities by 2015. The implications of NFC and BLE’s integration are important for retailers, as they will bring mCommerce and brick-and-mortar stores closer together, pushing Omni-Channel one step further in its evolution.

One of the biggest points of contention in the NFC vs. BLE debate is their potential as the next payment solution. For shoppers, the benefits of NFC systems like Apple Pay are obvious: convenience, efficiency, security, and privacy. For merchants, it will open new opportunities, offering a friction-less payment experience and a way to thwart cart abandonment during checkouts.

Moreover, Apple Pay’s implementation of its payment tokenization system (the concept of keeping your information private by using alternate numbers) is a step in the right direction. If payment tokenization is widely accepted, merchants will further distance themselves from PCI compliance, its related costs, and the liability that comes with storing sensitive information. With BLE-enabled payment solutions like PayPal Beacon, it will be interesting to see how well Apple Pay fares, and ultimately where the NFC vs. BLE debate goes.

Other Sources:

1. Apple WWDC 2014 Keynote Speech
2. NFC Tags
3. NFC in Retail
4. iOS Updates Relating to iBeacon (22:05 and 23:50)
5. iBeacon Range and Specs vs. NFC Range and Specs
6. PayPal Beacon

Image Credits:
Image 1, Image 2 , Image 3, Image 4, Image 5

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