Visa token service key to Apple's mobile payments plans - analysts

Analysts at Pacific Crest Securities (PCS) have joined the Apple mobile payments guessing game, speculating that recent security moves by Visa will see the iPhone 6 go contactless.

  12 3 comments

Visa token service key to Apple's mobile payments plans - analysts

Editorial

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Last month reports surfaced claiming that Apple is in talks with Visa ahead of a potential mobile wallet launch when the iPhone 6 arrives this autumn.

In a report, seen by Barrons, PCS analysts say: "We think a partnership between Apple and Visa would make strategic sense and believe an announcement could happen as early as this fall."

The report argues that the spur for collaboration could be Visa's new token service, which replaces the 16-digit number found on plastic cards with a numeric substitute that can be stored directly on mobiles, facilitating transactions without sharing sensitive information.

In a note to clients, seen by MarketWatch, one of the report's authors, Josh Beck, writes: "Apple could use its large stockpile of iTunes accounts and cards on file (about 800 million), along with Passbook and a new token partnership with Visa, to provide a highly scalable payments platform."

However, while the PCS report says that Visa's new token technology offers a "clearer path for Apple to become a major player in mobile payments" the firm cautions that "we still see relatively little opportunity to generate profits that would be meaningful at Apple's scale".

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Comments: (3)

A Finextra member 

Well now, tokenisation used to be the bees knees. So, it has come back into favour, a move supported by us here at Chasm Mnagement Limited, and features as part of our overhaul plan for financial services. BUT, there always is one, tokenisation needs a bit more consideration than that. 1. Where does the token get replaced? How far into the depths of the recipient? 2. How does the tokenisation and detokenisation databae get synced and how often? 3. How long is the token vLid for? 4. What about passing the tokenised data to a recipient who not part of the token club? Particularly, will it work cross-border? And ofq course, as we are used to saying here, it is I advisable to,junk a Chasm in more than one bound! This tokenisation could and should be extended to wrap the participants in an envelope that provides PCI-DSS compliance freedom within it. As does our design. Of course. End of gratuitous plug.

A Finextra member 

More speculation on what Apple might do.  No one knows what they will do, except maybe Apple higher-ups.  So stay tuned. Maybe APPLE, IBM, VISA, and someone else, will announce a new joint venture or partnership revolutionizing the payments space.  Maybe.  But, probably not. Most of payments, has been evolution, not revolution.

A Finextra member 

This is a step forward in the security space. A token key is a credential that could be decrypted and in which case a security flow will rise. I would most likely be safer if we can cross the gap and used digital finger prints.

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