Payments and Rewards with Your Smart Phone

We love near-field communications (NFC), the technology that enables you to pay for purchases with your smart phone. We love the security factors built into it. Banks and merchants are loving it more, too, because now they launch more loyalty programs to reward themselves – and even you. It’s the logical extension of programs that started with books of trading stamps from grocery stores and gas stations and now extend electronically from purchases at coffee bars to international vacation packages.

There’s a lot at stake for banks and retailers because the citizens of nations with developed economies still spend a lot of money. And while some older consumers dislike waiting for charges to be approved using the more secure chips in their credit cards, millennials and their older siblings are embracing mobile payments. With smart phones almost always accessible, it’s easy to tap a payment station with your phone or hold it close to the station, enter your passcode and keep going with life.

That phone, of course, contains a wealth of information that merchants and banks can tap into with their big-data systems. They can use the data to optimize rewards programs for their customers based on what you and where you buy it. Financial industry research shows that the more affluent you are, the more likely you are to use digital payments whenever you can. And a good number of you are likely to use digital coupons on your smart phone.

You might say a perfect storm is forming. As the use of smart phones grows for all sorts of purchases, merchants and bankers will offer more incentives, and that will draw more people to the technology. That will ratchet up new programs to attract more users in a continuing spiral. The financial industry sees big changes in the next three to five years.

What can our transactional environment look like over the next few years? It’s not that hard to imagine. Your browsing history may show, for example, that you are looking for a new computer in the $1,000 range. With location services turned on for your phone – because you used it to find the fastest route to the shopping mall – the retailer and the bank that supports your credit card can easily deduce that you are entering a store to make a purchase.

Together, the retailer and bank can send a message to your phone to let you know that if you buy a specific computer-and-accessory package today, you are eligible for a discount from the price you saw during your online shopping – or you may be eligible for extra miles from the airline that sponsors your credit card – or you may get extra cash back for this purchase.

Or, your credit card company may have an arrangement with another retailer nearby, and they can offer you rewards to go to their retailer. They can let you know about their specials before you go into any store.

The driver in all of this is likely to be the bank that supports your credit card – or more realistically that has the credit account you access from your phone. They are the ones who “lend” the money when you charge a purchase or collect a handling fee on a debit purchase. The sheer volume of money changing hands creates incentives for them to incentivize you.

In turn, you will need to pay closer attention to the security of your smart phone. You will need to make sure you always have the latest operating system on your phone and that you have all appropriate anti-virus and anti-malware software running – on your computer or tablet as well as on your phone. And you will need to pay special attention to all offers you receive over your smart phone. If a retailer or bank can send a special offer to your smart phone, so can a scammer.

We can help you reap all the benefits of your rewards programs by making sure all of your technology has the latest security software properly set up to match the way you live. Call us – 973-433-6676 – or email us to help you make sure you are good to go.


Security and Convenience

Major retailers have been vulnerable to security breaches because we want convenience. New credit card systems that rely on chips instead of magnetic strips will help solve the security issue and so will Apple’s new ApplePay, which uses NFC (Near Field Communications) technology.

There won’t be any need to open an app or even wake your display because of the combination of NFC and the antenna in iPhone 6. To pay, just hold your iPhone near the contactless reader with your finger on Touch ID. You don’t even have to look at the screen to know your payment information was successfully sent. A subtle vibration and beep lets you know.

Instead of using your actual credit and debit card numbers the system assigns a unique Device Account Number that is encrypted and securely stored in the Secure Element, a dedicated chip in iPhone. These numbers are never stored on Apple servers. When you make a purchase, the Device Account Number, along with a transaction-specific dynamic security code, is used to process your payment. So your actual credit or debit card numbers are never shared by Apple with merchants or transmitted with payment.

If your iPhone is ever lost or stolen, you can use Find My iPhone to quickly put your device in Lost Mode so nothing is accessible, or you can wipe your iPhone clean completely.

This is a major step toward convenience and security. Another step will be the replacement of that magnetic strip on your credit with chip technology already in use in most of the world. Again, it will separate your credit and debit card info from the info stored by retailers.

Retailers’ storage of your transactions and credit and debit card info has given you the convenience of being able to return merchandise without a receipt. It also presented a plump, juicy target for hackers. Banks, which bear the liability of covering the cost of fraud, are behind efforts to speed up the conversion to this new technology. Their goal, of course, is to minimize their risk, and they’ll minimize ours, too.

New credit and debit cards will be better for those of us who still carry them around in our wallets. Apple Pay and evolving technologies will help us get rid of our wallets all together – and probably our keys, too.

Millennials are driving device technology. They don’t like to bother with carrying wallets and keys and anything else they deem bulky. The changes are likely to trickle down to the rest of us, especially as we find them to be secure and convenient.

While the new technology looks great, there are other steps you can take now to protect your data. We’ve discussed these measures before:

  • Strengthen your password. The greater the combination you can use of upper and lower case letters, numbers and special characters, the longer it will take for hackers to crack your password.
  • Use two-factor authentication for Internet access to your data. It’s a second password, a reference to a graphic symbol or an answer to a question. Dropbox now offers it, and you can click here to learn more.
  • Look before you click. Use common sense when clicking on websites or opening attachments to email. If something doesn’t look right or feel right, leave it alone.
  • Make sure your protection is up to date and running. Anti-virus programs, malware programs and firewalls for home and office systems can prevent unwanted problems and intrusions. Make sure you have all systems up to date and turned on.

Now you can buy your new iPhone 6 or 6+ and enjoy the benefits of Apple Pay and NFC – whenever the technology is activated, most likely in October.

What your thoughts on this? How willing are you to embrace this new technology? Share your thoughts with us. And if you have any questions about buying an iPhone 6 or 6+ or any other phone, tablet or computer and getting them all to work together, drop us an email or give us a call at 973-433-6676.

New iPhone Puts More Tech in Play

Apple’s new iPhone has raised the bar for the device industry and for you, the business owner and consumer. You should consider upgrading to a smartphone and upgrading your tablet because more and more of everyday living will require it.

The new iPhone 6 and 6+ are going to improve your convenience and online security when Apple Pay and NFC (near field communications) technology kick in. As the technology expands, it will be possible to use it in more stores and for other payments such as electricians, plumbers, appliance repairs, landscaping, taxi cabs, etc. Train and bus riders with monthly passes may be able to use their cell phones more and more, eliminating the need to carry separate cards.

You might also find it possible to enter your home or place of work with your cell phone – and for owners to quickly reset access codes.

At home, smartphones and tablets can be integrated with computers to control home entertainment systems, lighting systems and your kids’ access to the internet. You can use your cell and home phones almost interchangeably to start a conversation on one device or system and continue it on another.

The possibilities to do more with smartphones and mobile devices seem to be unlimited. The only limiting factor may be the phone or device itself.

If you’re carrying a flip phone, for example, you likely don’t have access to the Internet for doing any kind of research, getting directions, making purchases or accessing email. You likely have SMS or texting capability, but it’s cumbersome. If all you want phone for is to talk, that’s fine.

If you have an older smartphone, you can still do the basics: find a nearby restaurant or gas station, purchase goods and services online, get your email and maybe watch streaming content. But your options will always be limited, and you’ll never get the performance that is driving so much of our online traffic.

Concurrent with the new iPhones, for example, Apple has released iOS 8, but it will only work with an iPhone 4S or newer model or with an iPad 2 or newer.

Apple is not alone. Samsung is already taking preorders for its new Galaxy Note 4, and you can bet that will raise the bar for performance and features.

On top of that, the major device manufacturers and OS developers will be keeping pace. Why? Because we not only want to be able to do more things online, we want to be able to do more of the things we already do, such as watch movies, play sophisticated games and make even more use of our Internet applications.

Within all of this, you will need to choose a device manufacturer, a cellular carrier and a phone and data plan. In addition to making technological choices, you’ll need to make financial choices and decide how long you actually want to keep your phone or tablet. Depending on what you need and what you want, you may need to replace your technology more often, and that will affect the device and carrier you choose.

Whether you’re a business with 20 computers and devices or a family, we can help. Once you get past the “ah” factor or the “OMG” moment, we can help you choose a technology that matches your needs and your budget as best as possible. Call us – 973-433-6676 – or email us for answers to your questions and to set up an appointment.