September 20, 2014
On Changing Banks, or, Why I’m Prepare to do Crazy Things to Use ApplePay
Apple’s ApplePay (excuse me, Pay) announcement couldn’t have come at a better time for me. Well, maybe not better, but more timely. Definitely not better.
I got a notice in the mail this week that my card was identified as one that was taken in Home Depot’s recent breach. Last night, as I purchased a new case for my iPhone, my existing card was declined because of said breach, but I hadn’t yet activated my new card. This is the second time in the last 12 months that I’ve lived this scenario, and both were a pain in the ass.
Needless to say, the idea of using one-time codes and two-factor authentication in my credit card transactions is incredibly appealing. Bring on the Future.
I have been with the same bank for a long time now – since 1994, if memory serves. Coming from a family that hadn’t changed banks in several decades (despite several acquisitions), this felt normal. We only switched to our current bank because we knew the families that started it, and received benefits as such. My bank has chosen to focus on customer service over feature sets, and for them, that’s a wonderful decision. Many customers would be thrilled to have a bank that reissues a debit card when it is found vulnerable. To a certain extent, so do I. But for this bank, it has come at the cost of technology – purchased, loosely (in the bad way) integrated solutions has made the flow of data slow. Transactions take days to show from the card processor to the online component. Other decisions include only receiving a banking app two years ago, and still not being able to deposit from my cell phone. As I said, the majority of the customer base doesn’t care about these things – my bank targets affluent, older customers. I am not either of those things. More so, I’m a technologist. I want these features.
Why the short story about my bank? Because I can’t envision the time that they will open up to ApplePay, and this time I think my impulsion to make a big (I think changing banks is big) change is warranted. Yes, I want to pay for things with my cell phone. I think that’s the future. I even did it once with Google Wallet and my Nexus S several years ago. But this is when it sticks, and when the world starts to change, I want to be there.
Compared to the rest of the modern world, swiping a credit card is antiquated. Think about it – you hand your card to someone who then walks away from you, maybe out of your line of sight, and brings you back a slip of paper that you sign on. Now you’ve not only opened yourself up to having your card skimmed, but they have a copy of your signature. Sure, you can write “SEE ID” on your card, but that’s not technically allowed and definitely not required. It’s archaic.
The idea behind ApplePay changes that. Your card number is not saved on the device at all. Instead, an anonymous, secure code is stored on a hardware encrypted chip, and your fingerprint is required to decrypt. That’s two factor – something you have (the card token) and something you are (your fingerprint). The code that is sent to the merchant – which is not the code on the card, by the way, but a second, hashed code – is one time only, so if another breach occurs, the code that is received isn’t useful anyway since it’s already expired. The only trade-off? You’re the weirdo paying with your cell phone. But it really is the future, and one day we’ll all be doing it.
I really believe that ApplePay is that important. Visa and MasterCard (and AmEx and Discover, but to lesser extents) have held up chip and pin in the States for too long, and if they hadn’t, I wouldn’t need to get a new card every six months. Credit card processors, banks and merchants need to know that consumers want this, and we don’t want it to be locked down to single-application uses – I don’t want to have to open my Home Depot app to pay at Home Depot, for example. By partnering with the card issuers and banks, Apple has abstracted away single-use solutions. Any, by using NFC as the transmission protocol (an already established method of doing it), they’re leaving the gates open for Google to push Google Wallet harder and bring it to more Android devices. Initially, some merchants will hold out, but there, too, we’ll vote with our dollars, and prefer places we can use the technology. This is how Apple changed the music industry (for better or worse, but that’s not what’s at question here), and this is how they will help change – and secure – the payment card industry.
So, with all that, I’m seriously weighing the benefits (and risks) of changing banks, and leaning toward doing it. Yes, it’s to get a very specific feature, yes it’s impulsive, and that’s generally the recipe for a bad decision, but this time around, I feel it’s warranted. While I appreciate the features my current bank offers, they’re not what I need (and in some cases, take advantage of) at this point in my life. I will keep my accounts with a minimal amount in them, but for my day-to-day banking, I will find a bank with more modern, forward-thinking technology. Besides, nothing is forever, and I can always go back.Disclaimer (I’ve always wanted to write that) – I work for a large, multinational retailer that at one time operated a bank and still offers their own proprietary payment cards, as well as accepts all payment cards. While I didn’t work directly on point of sale, I was exposed to it and familiar with how it works.