iPhone5, iPad2 Coming with Built-in NFC Payment Tech
Near-Field Communication technology allows phones to be used as a digital wallet purchasing items and transferring money with the wave of a phone. Google has expressed interest in it, and according to one analyst, Apple plans to put it in the next generation of iPhones and iPads.
Apple mobile commerce manager, Benjamin Vigier, has worked with near-field communication technology at previous companies, including Starbucks and PayPal, and may have been one of the driving forces for implementing NFC payment options in new Apple devices.
NFC-enabled phones are still relatively unknown in the U.S., although they have been popular for years in Japan and other parts of Asia. A phone with NFC capabilities simply needs to pass within 4 inches of a receiving device to transmit account data for a purchase. In that sense, it's just like the credit card in your wallet, except it doesn't need to be swiped through a machine.
NFC payment has gotten a slow start in the U.S. partially because of security concerns, which many experts and companies dismiss. Doherty says Apple may completely revamp payment options with this technology, including changes to iTunes. iTunes would become more than just a music and media service, it would also track account information, loyalty credits and points accumulated from purchases at various stores. This effectively turns iTunes into a glorified financial service.
Doherty also said the company might give free or subsidized payment terminals to merchants in order to accelerate adoption. This would likely spur other manufacturers to include NFC chips in their phones.
The iPad 2 is expected to be announced in the coming months, while the iPhone 5 will likely follow Apple's annual tradition of a summer announcement for iPhones. Regardless, it's time to start placing bets on what the service will be called: iWallet? iAccount? iDebit? iPay? iWesternUnion?