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What Apple’s Fingerprint ID Changes Mean for Its Big Mobile Payments Plans

Not much in the short term, tons in the long term.

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Jason Del Rey has been a business journalist for 15 years and has covered Amazon, Walmart, and the e-commerce industry for the last decade. He was a senior correspondent at Vox.

No, Apple didn’t unveil specific plans at yesterday’s WWDC for how the iPhone will facilitate payments in stores and within other apps in the future. (That’s likely because those plans are still very much a work in progress). But it did serve up an appetizer in the form of an update to how its Touch ID fingerprint authentication technology can be used going forward.

Up till now, iPhone owners could only use the fingerprint technology to accomplish a few tasks: Unlock their phones and purchase apps and digital goods via iTunes and the App Store. That will change soon.

As part of Apple’s mobile software upgrade to iOS8, companies that make apps for iOS will be able to allow their users to log into their apps with the same iPhone fingerprint feature. No usernames or passwords necessary.

Here’s a hypothetical example: Your bank’s app may typically ask you to enter your password every time you open the app. (I know mine does.) In the future, you may be able to sign into its mobile app by pressing your thumb against the home button instead of entering your username and password. And, at least in theory, using your finger should be quicker and may be even more secure, depending on how weak your login password is.

At the same time, it doesn’t seem that the Touch ID API will — at least for now — help facilitate payments. That is, Apple gave no hint that shopping apps, for example, will be able to let their customers pay for stuff with their fingerprint in place of entering in traditional payment information such as a credit card number.

Still, every payment industry insider I spoke with on Monday fully expects Touch ID to eventually play a role in letting you pay for stuff outside of the App Store with your iPhone, in partner apps or even in the physical stores of partner retailers. Eventually, the authentication technology could help digital wallet apps become easier to use in the battle to replace real wallets at the checkout counter of physical stores.

“The current mobile wallet use case is far more onerous than pulling a piece of plastic out of one’s wallet, which is why adoption has really struggled thus far (download app and enroll cards up front; then, while at merchant: grab phone, unlock phone, open wallet app, choose payment type, authenticate in the wallet app, then actually make the payment … ),” CardFlight CEO Derek Webster wrote in an email. “The hope is that involving Touch ID can reduce enough of those steps to make mobile wallet a better use case for paying than [the] current model of taking out and swiping [a] card.”

And, within third-party apps, you can imagine a few scenarios in which your fingerprint will help you complete a purchase. In one hypothetical, Apple could let you use your fingerprint to authenticate a purchase in another retailer’s app by using the card you have on file with iTunes or the App Store. In another scenario, Apple could enable a payment company like PayPal to allow its customers to use their fingerprint to log in and pay with PayPal within a third-party shopping app.

But that’s a ways off. Apple is still interviewing and hiring payments industry executives to help bring its payments strategy to fruition, so it’s not clear when any of these use cases will roll out.

Opening up the Touch ID authentication service to other companies is definitely a first step — albeit a small one — in that direction.

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