Last week, I wrote a column entitled “Understanding Apple’s Wearable Strategy” where I laid out the idea of using an iWatch or iBand for personal ID. I mentioned I had used a RFID band while at Disney World and I could see Apple making digital identity a key pillar of any wearable device they bring to market.
In the column, I mentioned how Disney used two kinds of authentication as part of their band ID program. The first part of the ID came through RFID and each band’s RFID radio would have to be touched to a scanner. When going into the Disney parks we had to scan at the RFID terminal in the entrance and also use a fingerprint reader for additional authentication to show the band in use was tied to an individual and was not being shared. Then, at restaurants and shops, we just scanned our RFID band at terminals but, instead of using fingerprint readers for the secondary authentication, we used a registered PIN number instead. The ID band worked flawlessly and provided a level of convenience that made them worthwhile.
In Europe and Canada, they use credit cards with embedded chips. When you use them at a terminal, you put in your PIN number as part of its dual authentication program. In the US, we still don’t have “Chip and PIN”. When I use my American Express card with a chip on it in Europe, I have to do what is called “chip and signature” instead of using a PIN as part of this dual authentication process. However, it’s much less secure than the chip and PIN ID program. This has cut down on credit card fraud dramatically in Europe and Canada and some day we will have Chip and PIN credit cards in the US to better ward off credit card fraud here too.
When I wrote this column I did not have enough time or space to add the elephant in the room — when it comes to digital IDs and especially using things like RFID, Bluetooth and even WIFI in these programs, these technologies bring up key issues of privacy and tracking. Indeed, Disney has had some pushback on their ID band program since some people are not happy about Disney being able to track them when in the park and knowing exactly what they are doing or buying. Any company adding digital ID technology to their wearables will have to deal with this same concern as a lot of folks would be leery of any tech company’s ability to know what we are doing and more importantly using that data inappropriately.
In the column about Apple’s wearables I stated I did not think Apple would introduce the ID aspect of their wearables at launch and instead focus on health and home applications at first. They would need time to build up trust with their wearable customers with the initial health and home apps first. They need to show they can be trusted with the data and any tracking would be anonymous and never given to anyone for any reason. This would be critical for Apple and anyone doing a wearable with any ID app-related program involved.
Interestingly, although Disney has had pushback, well over 95% of people on their properties use the bands because they are so convenient and compelling. Disney is a trusted brand and only uses the data to help with crowd control and making it easier to navigate and use park rides, restaurants, etc. seamlessly. Apple appears to have a similar level of trust with their customers since they have close to 900 million user credit cards and go out of their way to keep them secure and not track people as part of their trusted programs. I suspect Apple could pull off any ID program in a wearable much better than Google could — our research shows Google is much less trustworthy than Apple at this time and Google would have to do a lot of work to get their customers up to the level of trust Apple has with their customers.
The bottom line is I believe the role ID would play in wearables would be a killer app. Having dual authentication will be critical to its success as well as the company behind the wearable device would have to deliver a level of trust to their customers beyond what they expect today. However, as I learned from my Disneyworld experience, its convenience factor trumped any of my privacy concerns. It was easy to trust Disney with that information. I suspect Apple could get a similar response from millions of their customers if this was part of their wearable devices and, if so, it could become a monster product for them.