Cashless buying and selling by (Smart) phone comes to America

Apple iPhone 6 to feature mobile wallet NFC payment system

New contactless mobile payments service will put Apple in competition with PayPal, Google, US mobile networks and banks

Juliette Garside and Alex Hern in London

theguardian.com, Tuesday 9 September 2014 14.26 EDT




Eddy Cue introduces ApplePay. Photograph: Apple


Apple has introduced a mobile wallet in the iPhone 6, joining a growing army of banks and technology companies aiming to wean the world away from cash.

Owners of the latest version of the world’s best selling mobile phone will be able to pay for purchases at tills and eventually journeys on buses and tube trains by touching their phones on wireless readers.

Experts are already predicting that Apple’s new iPhones could revolutionise the way we shop in the same way that the Californian computing group has already transformed the music, mobile and personal computing industries.

Tim Cook said: “We’re gonna start by focusing on payments. Payments is a huge business. Every day between credit and debit we spend 12 billion dollars. That’s over 4 trillion dollars a year, and that’s just in the United States … 200 million transactions a day. That’s 200 million times we scramble for our credit cards and go through what is a fairly antiquated process.”

Users will scan and add a card to their iPhone. In an effort to allay security fears, Apple said the Find My iPhone app will be able to suspend all payments from a device if it is lost. Apple will not know how much is spent on an item and the cashier will not see the security code.

The service, known as Apple Pay, launches in the US with American Express, MasterCard and Visa, along with banks representing 83% of all credit card payments by volume. McDonald’s will have compatible tills, along with Disney’s theme parks and the Whole Foods Market. Developers will be able to build apps for Apple pay using an API available from next month.

The technology, which Apple has been developing since 2009 when it filed the first of an estimated 23 patents on wireless payments, has already reached a tipping point in the UK, where most current account holders already own touch to pay cards.

Chains including sandwich maker Pret a Manger, coffee shop group Starbucks and many newsagents already accept these so called NFC (near field communication) payments. They allow devices, each equipped with an NFC chip and placed within a few centimetres of each other to exchange data.

The path to creating a mass market substitute for cash is littered with failed attempts by some of the best known names in banking and technology. Released in the US in 2011, the Google Wallet limps on but a planned expansion to the UK was cancelled. After vowing to change the way the world buys stuff, Twitter’s founder, Jack Dorsey, withdrew his Square Wallet from the Apple and Google app stores, while Visa’s V.me, which launched in Europe last winter, and was rebranded Visa Checkout this summer and has barely registered at the tills.

With more than 800m iCloud accounts in use, of which almost all have a credit card attached for payments for apps, movies and TV shows, the move means Apple could rapidly become one of the most powerful forces in mobile payments, where it will contend with Google’s Wallet scheme, similar efforts from PayPal and another run by US carriers that has recently been rebranded as Softcard. Neither Google Wallet nor Softcard has achieved significant uptake among users or retailers – and all eyes will be on Apple to see whether its initiative stalls, or takes off.

ApplePay will also work online, and, of course, in apps on the company’s devices.

Apple will have to reassure customers worried over last week’s iCloud hack, in which celebrities saw private pictures taken on iPhones spread on web chatrooms, that their mobile details will be safe.

Anthony Duffy, a director of retail banking at Fujitsu, said: “With the launch of the iPhone 6 and its payment capability, Apple has once again sent out a challenge to the industry – and this time it has the payments market in its sights. This sector, already undergoing massive evolution as Internet and mobile payments take hold and new providers target perceived opportunities, will be revolutionised if Apple’s mobile wallet grabs the public attention.

However, the credit card details associated with an iCloud account cannot be copied from it, even when accessed using the owner’s email and password.

“We don’t store the credit card number, and we don’t give it to the merchant … each time you pay, we use a one-time payment number along with a dynamic security code,” explained Eddy Cue, the company’s vice president in charge of software.

In a nod to rival Google, Cue also boasted of the service’s focus on privacy. “Security is at the core of Pay, but so is privacy. We’re not in the business of collecting your data.” Apple won’t store where users spend their money, what they bought, or “any other details”, Cue said.

Attacking the dominance of credit cards, Apple’s CEO, Tim Cook, said that “we’re totally reliant on the exposed numbers and the outdated and vulnerable magnetic stripe interface. It’s no wonder that people have dreamed of replacing these for years, but they’ve all failed.” He blamed the prior failures on attempts to build “self-centred” business models.

According to eMarketer, US “mobile proximity” (NFC phone) payments amounted to $745.96m (£462m) in 2012, rising to $1.6bn in 2013. That however compares to total retail transactions worth trillions of dollars. In 2013, 11.16 million Americans made NFC-based mobile phone payments, amounting to just 8% of US smartphone users, though that marked a 57.1% increase from 7.1 million in 2012.

That means that for the whole of 2013, each user spent about $143 in total – up from $105 in 2012. Figures from Visa Europe indicate that across Europe there are 90m contactless cards in circulation, 1.5m contactless terminals, and that the average contactless purchase is worth €9.31 (£7.45). The number of transactions is still growing: they were worth 20m in the whole of May 2014 in the UK, according to Visa.

Apple’s system will enable people to make payments using the contactless payment technology already built into most British credit and debit cards and the Oyster travel payment system. It has had slow take up in the US, where comparatively few tills and cards are NFC-equipped – although tens of millions of Android smartphones are.

NFC systems used in the UK let users pay for goods up to £20 without having to swipe, insert the card into a reader or enter a pin. Instead they tap the card against a suitably equipped reader and the purchase is confirmed.

Having previously eschewed NFC, Apple has included it in its newest products – creating a new way to encourage people with iCloud accounts to transact on the credit cards registered there. Before Tuesday’s event, news site NFC World pointed to 23 NFC-related patents that Apple has amassed since 2009, the year before Google introduced the first NFC-enabled Android phone, the Nexus S.

Worldwide mobile payments surpassed $235bn in 2013, according to Gartner, a research company.

“We expect global mobile transaction volume and value to average 35% annual growth between 2012 and 2017, and we are forecasting a market worth $721bn with more than 450 million users by 2017,” said Sandy Shen, research director at Gartner.
iPhone 6: bigger, thinner, faster
How Twitter reacted when Apple’s launch didn’t go according to plan

• This article was amended on 10 September 2014 to update figures for the number of contactless cards and payment terminals in circulation.


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Related

Wendy’s Joins Burger King With New Mobile Payment iPhone App


John Brownlee (12:20 pm PDT, Mar 23rd)



It looks like paying for burgers using your iPhone is the next big trend in fast food.

Following Burger King’s announcement last week that it would be releasing a dedicate mobile app, Wendy’s has followed suit, unveiling their own iPhone-based payment app that will allow you to pay for Big Bacon Classics at any of Wendy’s 5,800 locations.

The app works a bit differently than Burger King’s app, which gave you a Passbook-style gift card that could be scanned on your iPhone. Rather, Wendy’s system allows users to launch the app to pull up a six digit number that can be given to a cashier for payment. Wendy’s said it’s a more suitable system for drive thrus, where you don’t want to have to give a server your iPhone from your car window.

Like Burger King’s app, the Wendy’s app functions as a virtual gift card, which you can top up or reload with money as you see fit. As of right now, though, there are no discounts or loyalty perks for users who use the app instead of paying in cash.

You can download the My Wendy’s app on the App Store for free here.



Source:  http://www.cultofmac.com/271259/wendys-joins-burger-king-new-mobile-payment-iphone-app/#3MiCY1jkTIs8c2Xf.99
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The Billion Dollar Data Centers

By: Rich Miller
April 29th, 2013



An overhead view of the server infrastructure in Google’s data center in Council Bluffs, Iowa, where the company has invested more than $1 billion. (Photo: Connie Zhou for Google)

Maiden. Council Bluffs. Boydton. Bluffdale. And now Lenoir and perhaps Altoona. These are the cities you’d never heard of that have become the homes of billion-dollar server farms.

Your iTunes downloads, Facebook posts and YouTube videos travel through these small rural communities en route to your desktop and mobile device. The growth of the digital economy is not just reshaping how we use the Internet, but creating a new data center geography in which armadas of servers now reside in suburbs or rural towns, often outnumbering the humans in these communities.

The economics of hyper-scale computing favor cheap land and cheap electricity, which are unavailable in many of the historic Internet hubs, which are located near major cities. This has created an unusual side effect – major data centers are transforming the economies of small towns around the U.S., placing them on the front line of the race to build out the infrastructure that runs the Internet.

A handful of these towns have received concentrated investment of more than $1 billion on a campus of server farms. Google, Apple, Microsoft have each deployed these billion-dollar data centers in little-known towns, and Facebook is not far behind.

Symbols of the New Economy

These projects have been hailed by governors and economic development officials, who see data centers operated by Internet titans as symbols of the new economy. Huge server farms are hailed as saviors of rural communities, which have often been abandoned by the factories that were once the lifeblood of the local economy.

Yet data centers don’t fit neatly into the traditional model of economic development engines. They have been reliable generators of hundreds of construction jobs, which are welcome but temporary. But the advanced level of automation at work in data centers translates into a limited number of permanent full-time jobs, and much of the investment arrives in the form of servers, generators and UPS equipment.

Here’s a look at the billion-dollar data centers:

Maiden, North Carolina – This town of 3,300 people in Catawba County is home to the iDataCenter, Apple’s first company-built data center facility. The campus began with a 500,000 square foot main building and a 30,000 square foot “tactical” data center next store. Apple has since added two massive solar arrays and a “fuel cell farm” featuring Bloom Energy Servers fueled by gas from a nearby landfill.

Council Bluffs, Iowa – Google kicked off the data center craze in Iowa in 2007 when it announced plans to invest $600 million in a new facility in this town of 60,000, located just across the Missouri River from Omaha. Google clearly loves the location, as three successive rounds of expansion have raised its investment in Council Bluffs to more than $1.5 billion.

Boydton, Virginia – With its latest expansion, Microsoft’s investment in its data center campus in southern Virginia has reached $997 million. Microsoft has built more than 316,000 square feet of data center space in Boydton, a town in Mecklenberg County with just 431 residents as of the 2010 census. The company plans two more phases at the data center, a hybrid facility that includes traditional raised-floor space as well as IT-PAC modules.

Bluffdale, Utah – The U.S. government is also in the mega-data center business with its $1 billion-plus facility for the National Security Agency (NSA). The secretive project includes a 30-megawatt first phase featuring 100,000 square feet of data center space and 900,00 square feet for technical support and administrative space. Bluffdale, a suburb of Salt Lake City, has about 7,500 residents.

Lenoir, North Carolina – This town in Caldwell County in western North Carolina is home to 18,000 residents and more than 50,000 servers. Google opened a $600 million data center in 2007, and this month expanded its investment to more than $1.2 billion.

There are two other examples of data center clusters that have transformed small rural communities:

Quincy, Washington: This town of 5,000 residents in central Washington state is home to data centers for Microsoft, Yahoo, Sabey, Dell, Intuit and Vantage, which likely total more than $1 billion in investment. The server farms are attracted by the extraordinarily cheap hydro-electric power from dams on the Columbia River, and a climate ideal for using fresh air to cool servers.

Prineville, Oregon – Facebook put this central Oregon town of 10,000 residents on the map when it picked Prineville as the location for its first company-built data center. Apple has also decided to build a major server farm in Prineville. Between the two companies, Prineville may eventually one McDonald’s and six buildings filled with servers housing the world’s music, photos and status updates.

These locations all offer abundant land for massive facilities that can house of tens of thousand of servers, and the electricity to power these armadas of servers. They offer tax incentives that make it cheaper for data center operators to buy their land and servers. In many cases, they also offer the opportunity to cool servers using outside air instead of power-hungry chillers, slashing the cost of operating the data center.
The Economic Impact of a Data Center

What have these data center developments meant for these communities? Some of the best data comes from Quincy, Washington, where construction of Yahoo and Microsoft data centers boosted property tax values in the city of Quincy from $260 million in 2006 to $764 million in 2009. As a result, property tax collections grew by more than $1.4 million over the period, while school taxes in Quincy grew by $1.6 million.




An aerial view of the Apple data center in Maiden, North Carolina. The company has invested more than $1 billion in the data center in Maiden, a town of 3,300. (Photo: Apple)


Quincy used its higher tax revenues to improve city services, including improvements to its library, senior center, museum and playground equipment. Tax revenues were also been earmarked for new equipment for the police and fire departments and emergency medical services.

Facebook has invested $210 million to build the first phase of its new data center in Prineville, according to a study commissioned by the social network. About $75.7 million of that capital spending went to Oregon companies and workers. Facebook employs 55 full-time or contract employees, with a total annual payroll of about $3.3 million. The average annual salary of Facebook’s data center employees is $47,200, compared to a regional average of about $35,071 in 2010.

The report from ECONorthwest found that Facebook’s capital spending created $24.4 million in economic activity, including $9.2 million in personal income and 234 jobs. These impacts include about 80 direct jobs for local construction and other workers employed on-site, and about $1.2 million in sales for local lodging, eating and drinking, and retail sectors as a result of per diem spending by non-local workers.

Investing in Local Communities

The economic cost-benefit analysis has been tougher in North Carolina, where state and local governments have been criticized for the tax breaks offered to attract Google, which are estimated to total up to $260 million over the life of the project. There have been mixed results in the effort to retrain local workers from the furniture industry to seek jobs at Google, as noted in a 2009 series by NPR.

But with Google’s investment now at $1.2 billion, local officials say it has been worth it.

“Google pushes Caldwell County into a hub for the knowledge economy of the future,” said Caldwell County Chairman Jeff Branch. “Their continued investment in the Lenoir data center is a sign of their commitment to the area. It shows in other tangible ways with community activities they do to support small business owners and students learning the science and engineering skills necessary to succeed in the future.”

Google has awarded more than $1 million in grants to Lenoir-area local schools and nonprofits since 2008, and Google employees are engaged in a variety of volunteer projects in the community, including efforts to boost education in the STEM fields (science, technology and math). The search giant has made a similar effort in the Council Bluffs community, awarding $600,000 in local grants.

Altoona Awaits Facebook

So what’s ahead for Altoona, Iowa? Facebook said last week that it would build a new data center in Altoona, a suburb of Des Moines. The company will spend $300 million in the first phase of the project, but local officials have said the project’s long-term investment could exceed $1 billion.

Facebook has been pro-active in engaging the local business community in Oregon and North Carolina. While some are quick to point out that the biggest impact of new data centers is construction jobs, the breakneck pace of Facebook’s building program has made these more like permanent jobs in these communities, according to Tom Furlong, Vice President of Site Operations at Facebook.

“We’ve basically been under construction continuously on those sites since we began in Oregon,” said Furlong.

The trend is likely to continue. As we noted last year, “as states continue to offer tax incentives for data center projects, don’t be surprised to see massive server farms pop up in towns you’ve never heard of before.”

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Apple Chairman, Former CEO Steve Jobs Has Died

• OCTOBER 5, 2011, 9:10 P.M. ET

--Co-founder and Chairman of tech giant seen as driving force behind company's rise

--Jobs stepped down as CEO in August amid battle with cancer

--CEO Cook says company lost "a visionary and creative genius"

(Updates with reaction from others, beginning in paragraph seven, and details about Apple's stock, beginning in paragraph 13.)

     DOW JONES NEWSWIRES   

Apple Inc. (AAPL) said Chairman and former Chief Executive Steve Jobs died Wednesday.

Jobs had suffered a long battle with pancreatic cancer.

On Wednesday, Chief Executive Tim Cook said the company had lost "a visionary and creative genius."

"Steve leaves behind a company that only he could have built, and his spirit will forever be the foundation of Apple," he said.

The news comes after Jobs announced his resignation in August and recommended Cook, the company's then-chief operating officer, to be his successor. Jobs said at the time that he could no longer meet the "duties and expectations as Apple's CEO."

On Wednesday, Jobs's family asked for privacy in a statement released through the company and said a website will soon be available for those wishing to leave tributes and memories. "We are thankful to the many people who have shared their wishes and prayers during the last year of Steve's illness," the statement said.

Microsoft Corp. (MSFT) co-founder Bill Gates expressed his condolences, saying it had "been an insanely great honor" to work with his long-time rival.

"The world rarely sees someone who has had the profound impact Steve has had, the effects of which will be felt for many generations to come," Gates said in a statement.

Mark Zuckerberg, Facebook Inc.'s Chief Executive, said on his Facebook page Wednesday, "Steve, thank you for being a mentor and a friend. Thanks for showing that what you build can change the world. I will miss you."

Michael Dell, CEO and founder Dell Inc. (DELL), said, "Today the world lost a visionary leader, the technology industry lost an iconic legend, and I lost a friend and fellow founder. The legacy of Steve Jobs will be remembered for generations to come. My thoughts and prayers go out to his family and to the Apple team."

Under Jobs's direction, Apple grew to become one of the world's most powerful technology companies through breakthrough hits like the iPod, iPhone and iPad.

A statement from Apple's board said the company co-founder's "brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives."

After-hours trading in Apple shares was halted before the news and hasn't restarted. The stock, up 31% over the past year, closed Wednesday at $378.25.

In past years, Apple shares would react to news of Jobs's health and appearance; however, more recently, his health developments have had less impact on the stock because of Apple's rapidly growing business and Jobs's seemingly worsening condition. For example, on the day after Jobs stepped down as CEO in August, the stock fell less than 1%.

-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; andrew.fitzgerald@dowjones.com

--George Stahl contributed to this report.

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