Glenn Felson of Kastle Systems imagines a not-too-distant future where one of the only things you need when you leave home is your smartphone. Our phones are mini-personal computers, and we use them for nearly everything already. 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 Apple Wallet.
Felson, Managing Director at Kastle Systems, an access control provider, recently updated me on the progress of Apple’s foray into the access control market. The tech giant revealed updates to its Apple Wallet service in 2021 at its Worldwide Developer Conference, showing how Apple devices would soon be able to store state IDs, corporate badges, and more in Wallets. The company already has deals with TSA and several states to store official government IDs and airline credentials. The access control tech has been tested at Hyatt hotel properties, and BMW is reportedly working with Apple on digital car keys.
The ramifications for commercial real estate could be huge. Last year, I wrote about how real estate developer Silverstein Properties announced the implementation of employee badges in Apple Wallet. The feature is available for Silverstein employees and tenants at the World Trade Center, who can access offices, fitness centers, and amenity spaces with just a tap of their iPhone or Apple Watch.
Access control via Apple Wallet makes it easier to manage shared office spaces. One company could lease a suite at 7 World Trade Center on Monday, and another could lease the same area later in the week. Contactless access to the space can be managed through Apple Wallet, no physical cards necessary. Employee badges at Chicago’s 167 Green Street are also Apple Wallet compatible. Sharry and HID Global created the integration for the building, enabling employees to unlock key card spaces with their phones. WeWork is reportedly working on making its access cards compatible with Apple Wallet. According to some in the real estate industry, this could be only the beginning of a surge of new buildings turning to Apple for access control.
One app to rule them all
Mobile access control credentials aren’t new, of course. It’s been more than a decade since HID Global launched a pilot program to test mobile credentials with smartphones. Bluetooth Low Energy (BLE) is one modality used for delivering mobile credentials. BLE is a power-conserving Bluetooth personal area network tech designed for Internet-connect machines and appliances. It was initially introduced in 2004 and is critical for Internet of Things devices and mobile device access control. In access control, the main benefit of Bluetooth low energy is its read range, which can work from distances of a few inches to up to 15 feet. This technology helps open garage doors from a distance, for example.
A similar technology is near-field communication (NFC). BLE and NFC are both used to transfer info between or among devices, but near-field has been the preferred tech among access control providers for mobile credentials. This is mainly because enormous amounts of resources have been poured into NFC development for nearly a decade.
With NFC, the read range is limited to a few inches. But unlike BLE, it always works and offers a frictionless experience. “BLE is fine, but it has its challenges,” Felson of Kastle Systems said. “NFC is a superior technology.” The main advantages of near-field over Bluetooth low energy are that it’s cheaper, has a lower data transfer rate, is more secure, and connects instantly.
Access control vendors began rolling out pilot projects with near-field tech in the early 2010s, generating a lot of excitement. The problem was the deployments almost exclusively used phones with Android operating systems and no capability via the iPhone. iPhones have a much larger share of the U.S. smartphone market, so expanding mobile access with NFC wouldn’t happen en masse until Apple’s iOS could be used.
The differences between BLE and NFC are important, but that’s not the main story. The bigger news is the use of Apple Wallet for access control and what this could mean for real estate. Apple has toyed with NFC tech since the iPhone 6 but restricted its uses to ApplePay. It wasn’t until the recent release of iOS 13 that the company fully embraced NFC for access control.
The simplicity of using Apple Wallet for access control is one reason why it could be so impactful. When a digital credential like a corporate badge sits in Apple Wallet, there’s no need to open an app, like how Apple Pay works. You just hold your phone or smartwatch to the entry, and voila, it works. Even if your device dies, the credentials can work for up to four hours because near-field communication uses minimal battery power. The experience of using it for access control has been described as “frictionless,” likened to Captain Kirk on Star Trek approaching a door and having it open automatically.
The other reason Apple Wallet could be an access control game-changer is it can store all your keys in one place. Even for things used on an ad-hoc basis like 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 credential is authorized, just show up with your phone, and you’re good to go. Many companies already offer mobile access control through company-branded apps. If you’re staying at a hotel, you can likely download their app and get a digital room key. But none of these apps work for everything, so you need to download dozens of different ones.
The convenience of having one digital wallet to store everything may drive the mass adoption of Apple Wallet for access control. Real estate owners who use Apple Wallet can also offer the solution to Android users. It’s a little more complicated with Android devices because there are various apps like Google Pay to act as digital wallets, but it works essentially the same way.
Will we see mass adoption?
Apple’s integration of access control tech could pose a serious problem for tenant engagement apps. Tenant engagement apps offer valuable services to build loyalty between landlords and tenants, cut costs, and collect useful data. But the long-standing issue for many of these apps has been adoption. Tenants can order food, call a 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 driver of tenant engagement app adoption. If employees need to use the app to get into the office, this forces more downloads. This also pushes them to use app services they may not have used otherwise. The problem tenant engagement apps could face is that Apple Wallet credentials offer a more seamless experience. If workers can use Apple Wallet for access control to everything, fewer of them may download engagement apps. This is a touchy subject in the real estate industry because engagement app providers have developed close relationships with many developers. Ultimately, engagement app vendors may have to find another “must-have” service to drive more adoption.
The rollout of Apple Wallet for access control is still in the early stages, but Felson of Kastle Systems told me 2023 could be a big year. When Apple announced access control integration for its Wallet in 2021, they had a small list of launch partners they decided to work with. Since then, Kastle Systems has worked closely with Apple, and Felson said they’re very close to “going live” with news about Apple Wallet access credentials. “The reason I’m so bullish on this is because of the tremendous interest we’ve seen from real estate executives,” Felson told me.
There’s been a steady increase in the use of mobile credentials for access control 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 embrace mobile technology, and we still may be a bit away from mass adoption. Apple’s foray into access control could further it along. People want a more simplified experience with mobile credentials, and Apple’s solution offers that. Apple also has cult-like brand recognition, loads of capital to make a massive splash, and is known for the security and privacy of its products.
Mass adoption of Apple Wallet could have one notable snag, though. It’s not known whether Apple will charge for this type of use, but with Apple, the price is always a premium. Some employees may pay for the tech, but not all. The same goes for building owners, especially smaller ones. The pricing may be a concern given Apple’s history with its App Store, which has faced backlash from developers, regulators, and lawmakers for monopolizing software distribution. In early 2022, Apple also faced heat over an App Store policy change that enabled apps to quietly charge more for auto-renewable subscriptions without requiring customers to take action. There are conditions to the policy change, but it essentially requires customers to pay much closer attention to subscriptions.
Apple Wallet could still make big waves in the access control market despite these concerns. But will we soon see a world with no physical keys and access cards? Maybe. Roughly 85 percent of Americans now own a smartphone, up from about 35 percent only a decade ago. Apple also manufactures more than half of all U.S. smartphones sold. Still, it’s likely the newest mobile access control tech will be adopted by Class A properties soon. Many building owners may still see mobile credentials as a supplemental tech that offers an alternative to a physical access card, especially in lower-tier assets. Real estate has also always been notoriously slow to adopt technology. Apple Wallet’s impact as the master of mobile credentials will probably have a bigger impact on other industries first. Nevertheless, Apple’s entry into access control has the potential to be very disruptive. It’s something every real estate owner should have on their radar.
