Speaking at the White House summit on cybersecurity, Tim Cook announced that starting this September, iPhone users will be able to pay for federal services using Apple Pay. Initially, those services will include admission to national parks and other similar services. Later, the company intends to make Apple Pay work with more security-sensitive services such as social security services and veterans' pensions.
“We're excited to announce that beginning in September, Apple Pay will be available for many transactions with the Federal Government, like for example when you pay for admission to your favorite national park," Cook said at the Stanford event. “We're also working to make sure credit and procurement cards issued to government employees for their expenses can be used with Apple Pay, and we're working on initiatives with leading banks and networks to use this technology with benefits programs like social security and veteran's pensions that serve citizens at both the state and federal level."
Tim Cook also said that Apple is working with the U.S. government on making things such as driver licenses and passports digital, while still preserving the kind of strong privacy Apple Pay users get right now.
Apple Pay is the most privacy-oriented payment method out there because it uses unique tokens for each payment instead of the credit card number, which means merchants can't track multiple purchases from the same customer.
Touch ID is also one of the most secure identification methods in the world right now, while still being very easy to use. One thing Apple has done differently than other fingerprint-based solutions is that it doesn't store the fingerprint data on the device. Instead, a hash of the fingerprint data is created, and that is what's stored in a hardware-based "Secure Enclave." By using this method, Apple ensures that the fingerprint data can't be stolen from the device, even if the Secure Enclave is hacked.
Although having Apple create such a strong relationship with the government for federal services may end up marginalizing Android users for some time, it's probably better for everyone in the long term that it's Apple setting these strong security and privacy standards. If there was any other company, those standards could be much lower.
Apple may get a head start in adoption for federal services, but it's not going to monopolize digital identification for federal services. Sooner or later, the government will have to allow competitors to integrate with the government's systems, too, but by then they'll all have to embrace the high security standards Apple has paved before them.