Is Apple Wallet a game changer for access control?

Glenn Felson of Kastle Systems imagines a not-too-distant future where the only thing you need when you leave home is a smartphone. Our phones are mini personal computers, and we already use them for almost everything. But what Felson is talking about is the ability to digitally store all your physical keys, bank cards, and IDs in a little thing called an Apple Wallet.

Felson, CEO of access control vendor Kastle Systems, recently told me about Apple’s progress in the access control market. The tech giant unveiled updates to its Apple Wallet service in 2021 at its Worldwide Developer Conference, showing how Apple devices will soon be able to store state IDs, company IDs and more in wallets. The company already has contracts with the TSA and several states to store official IDs and airline credentials. Access control technology has been tested at Hyatt hotel properties, and BMW is said to be working with Apple on digital car keys.

The consequences for commercial real estate can be huge. Last year, I wrote about how real estate developer Silverstein Properties announced the introduction of employee badges in Apple Wallet. The feature is available to Silverstein employees and World Trade Center tenants, who can access offices, fitness centers and amenities with just a tap of an iPhone or Apple Watch.

Apple Wallet access control makes it easier to manage shared office spaces. One company could lease an apartment at 7 World Trade Center on Monday, and another in the same area later this week. Contactless access to the space can be managed via Apple Wallet, physical cards are not required. Chicago’s 167 Green Street employee badges are also compatible with Apple Wallet. Sharry and HID Global created an integration in the building that allows employees to open key card slots with their phones. WeWork is reportedly making its access cards compatible with Apple Wallet. According to some real estate professionals, this could be just the beginning of a rise in new buildings turning to Apple for access control.

One app to rule them all

Of course, mobile access control credentials are not new. It’s been more than a decade since HID Global launched a pilot program to test mobile phone credentials on smartphones. Bluetooth Low Energy (BLE) is one method used to deliver mobile credentials. BLE is a low-power Bluetooth personal networking technology designed for Internet-connected devices and devices. Originally introduced in 2004, it is critical for Internet of Things devices and mobile device access control. For access control, the main advantage of Bluetooth low energy is its read range, which can operate from a few inches to up to 15 feet. This technology helps to open, for example, garage doors from a distance.

A similar technology is near field communication (NFC). Both BLE and NFC are used to transfer data between devices, but near field has been the most popular technology among mobile credential access control providers. This is mainly because huge amounts of resources have been devoted to NFC development for nearly a decade.

With NFC, the reading range is limited to a few inches. But unlike BLE, it always works and offers a frictionless experience. “BLE is good, but it has its challenges,” Kastle Systems’ Felson said. “NFC is a superior technology.” The main advantages of near field over Bluetooth low energy are that it is cheaper, has a lower data transfer rate, is more secure and connects instantly.

Access control vendors began implementing pilot projects with proximity technology in the early 2010s, which generated a lot of excitement. The problem was that deployments were almost exclusively using phones running the Android operating system and not delivered via iPhone. iPhones have a much larger share of the US smartphone market, so the expansion of mobile access using NFC wouldn’t happen en masse until Apple’s iOS could be used.

The differences between BLE and NFC are important, but not the main point. The bigger news is the use of Apple Wallet for access control and what this could mean for real estate. Apple has been toying with NFC technology since the iPhone 6, but limited its use to ApplePay. It wasn’t until the recently released iOS 13 that the company fully implemented NFC for access control.

The simplicity of using Apple Wallet for access control is one of the reasons why it can be so impressive. When Apple Wallet has a digital credential, such as a company badge, there’s no need to open the app, like how Apple Pay works. You just hold your phone or smartwatch against the input, and voila, it works. Even if your device dies, login information can work for up to four hours because near-field communication consumes little battery power. The experience of using it for access control has been described as “frictionless”, compared to Captain Kirk in Star Trek approaching a door and opening it automatically.

Another reason Apple Wallet could be a game changer for access control is that it can store all your keys in one place. Even for things that are used on a case-by-case basis, such as in a hotel room, rental car or Airbnb. If you’re watching your friend’s dog, they can share their digital key with you. Once the credentials are authorized, just show up with your phone and you’re good to go. Many companies already offer mobile access control through company-branded applications. If you’re staying at a hotel, you can probably download their app and get a digital room key. But none of these apps work allso you have to download dozens of different ones.

The convenience of using one digital wallet to store everything may promote the mass use of Apple Wallet for access control. Property owners who use Apple Wallet can also offer a solution to Android users. It’s a little more complicated with Android devices because there are different apps like Google Pay that act as digital wallets, but it works essentially the same way.

Will we see mass adoption?

Integrating Apple’s access control technology can pose a serious problem for tenant engagement applications. Tenant engagement apps provide valuable services that increase loyalty between landlords and tenants, cut costs and collect useful information. But a long-standing problem with many of these apps has been acceptance. Renters can order food, call Lyft, and communicate with employees about emergencies and social events through the apps. But why order food from a tenant engagement app when you can just use DoorDash?

Access control has been the primary factor in the introduction of tenant engagement applications. If employees have to use the app to get to the office, this forces more downloads. This also forces them to use app services that they might not have used otherwise. The problem with tenant engagement apps is that Apple Wallet credentials provide a more seamless experience. If employees can use Apple Wallet to control all access, fewer of them will be able to download engagement apps. This is a touchy subject in the real estate industry, as engagement app providers have established close relationships with many developers. Ultimately, engagement app vendors may need to find another “must-have” service to drive adoption.

Apple Wallet adoption for access control is still in its early stages, but Felson of Kastle Systems told me that 2023 could be a big year. When Apple announced access control integration into their wallet in 2021, they had a small list of publishing partners they decided to work with. Since then, Kastle Systems has been working closely with Apple, and Felson said they are very close to “shipping” the news regarding Apple Wallet access. “The reason I’m so excited about this is because of the tremendous interest we’ve seen from real estate executives,” Felson told me.

The use of mobile identifiers for access control has steadily increased in recent years. Mobile credentials are the fastest growing access control product, expected to account for about 15 percent of all new credentials this year. The access control market has been among the last to adopt mobile technology, and we may still be some way off from mass adoption. Apple’s access to access control could contribute to that. People want a simpler user experience with mobile credentials, and Apple’s solution provides that. Apple also has cult-like brand awareness, plenty of capital to make a huge splash, and is known for the security and privacy of its products.

However, the massive adoption of Apple Wallet may have one significant problem. It is not known if Apple charges for this type of use, but with Apple the price is always higher. Some employees can pay for technology, but not all. The same applies to building owners, especially smaller ones. Pricing may be a concern given Apple’s history with the App Store, which has faced backlash from developers, regulators and lawmakers for monopolizing software distribution. In early 2022, Apple also faced heat for a policy change in the App Store that allowed apps to quietly charge more for auto-renewable subscriptions without requiring customers to take action. There are conditions for the change in practice, but it essentially requires significantly more customers to be attached to subscriptions.

Apple Wallet may still make big waves in the access control market despite these concerns. But will we soon see a world without physical keys and access cards? Can be. About 85 percent of Americans now own a smartphone, compared to about 35 percent a decade ago. Apple also makes more than half of all smartphones sold in the United States. Still, it’s likely that the latest mobile expense management technology will soon be implemented in Class A properties. Many building owners may still see mobile tags as an add-on technology that provides an alternative to a physical access card, especially in lower-end properties. Real estate has also always been notoriously slow to adopt technology. Apple Wallet’s impact as the master of mobile credentials is likely to have a larger impact on other industries first. Nevertheless, Apple’s move to access control can be very disruptive. It’s something every property owner should have on their radar.