Apple's New iPhone Wallet: Convenience Over Security?

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Sept. 2 (Bloomberg) –- Creative Strategies Principal Analyst Ben Bajarin and Bloomberg Contributing Editor Paul Kedrosky discuss Apple’s new venture into the digital wallet business and mobile payments. They speak on “Market Makers.” (Source: Bloomberg)

News intervening editor.

-- contributing editor.

What do you make of this?

I have been optimistic.

I feel it is time to be pessimistic.

Nfc is this idea that you can use your cell phone as a wallet and jump back-and-forth between one of the payment device is in the terminal.

It has been around for a while, but it has not gotten picked up, and then we had square come along that held it up.

This is the fifth or sixth coming up and fcp i should be more optimistic about it.

I think it is horrible news foursquare, but i do not think it will see rapid adoption for apple or anyone else.

How big a deal is it that apple is getting into this game?

A lot of other companies have tried to create a digital wallet business.

Google for example.

Paypal.

Good apple change things?

I think they could.

If you look at the consumer base that they have, it is larger than any other vendor in terms of vendor shipments were smartphones.

They lead the market and they have some of the most profitable consumers.

He beat of you look at things that are successful today, you we talk about -- starbucks has a mobile payment platform that they see upwards of 5 million transactions happening per month on that.

I think we are on the cusp of something that i think the smart phone market being more matured and apple being the dominant player in this category, owning the right customers is in the place to take the leadership position.

Why do you think apple did not just do this on its own?

Forge agreements to become a mobile payments network without having to go through the zone, a mastercard -- through visa, mastercard, american express get-go somebody people have a relationship with their credit card.

So to integrate with them and make a payment, you just pick which credit card.

Apple might fit in there so you can use their payment system.

But so many people are used to using credit cards that that is what the for china's -- the friction is.

What do you think about the fact that it is apple getting in the game?

Seeing as they are the company that never gets anything wrong, do you think we will see other companies follow suit?

Never gets anything wrong?

I will hold off talking about that.

I think google sees the same opportunities, and square is out there trying to push mobile payments and their own way.

Lots of people have been trying.

The missing pieces that is out there is the friction.

While people might want to follow it is going to be more compensated because the does not have the advantage of being preloaded with the data.

Is the opportunity for apple to make money on the payments themselves, or is it by harvesting the data that is generated by all these transactions and doing something else with that the way that google does with search?

I think it is 1% trying to make money off the transactions.

There's not a lot of money to be made there directly.

99% where you collect data about consumer behavior and do a better job of optimizing everything from ads to location-based offers and try to find ways to straddle that privacy divide and still give people value in addition to making transactions easier.

Right now they are a nuisance as you drop plastic and sign all over the store.

There is something for apple, when you look at their strategy, and is about retention, adding value, and boosting their ecosystem.

They do want to do things on their platform that gives existing consumers happy, but adds value to those considering their platform.

A lot of our data, the convenience of that, and brings loyalty back to the platform.

The ecosystem value is there whether they make money on it or not.

Is the convenience enough to overcome people security fears?

Look at what happened this weekend, the icloud was hacked.

I have to feel that jennifer lawrence is leery of views occur phone as a payment device.

There is an interesting way to solve that.

If you look at what apple is doing with touch id, which is securing your fingerprint into the hardware at an encrypted level, there are ways that that could play out.

They could put more into the secure enclave and make that much more encrypted.

We are in the early stages of that, that is certainly an issue . we have had this conversation for the past 10 years that i have been doing this about security.

Even credit cards themselves are an and harriet lee insecure transaction -- an inherently insecure transaction.

Can i as you, when we talk about the importance of security, and maybe people do not realize the significance of how you can get hacked, how do joint celebrities who have security and publicist and agents, and managers, and handlers not realize that they need to be stored in early careful -- extraordinarily careful?

A lot of this is about people's willingness to put out information that they probably should not be putting out in the cloud.

Let's put that aside for a second, and say there was a problem with find my phone inside the icloud service where you can repeatedly ask for the password.

There are new new photos in our phones, so we are ok.

Wethank you to our guests.

Coming up next, more on cyber security.

The experts are trying to stay

This text has been automatically generated. It may not be 100% accurate.

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