Apple plans NFC service that will let users pay with iPhone 5, iPad 2

“Apple Inc. plans to introduce services that would let customers use its iPhone and iPad computer to make purchases, said Richard Doherty, director of consulting firm Envisioneering Group,” Olga Kharif reports for Bloomberg.

“The services are based on “Near-Field Communication,” a technology that can beam and receive information at a distance of up to 4 inches, due to be embedded in the next iteration of the iPhone for AT&T Inc. and the iPad 2, Doherty said,” Kharif reports. “Both products are likely to be introduced this year, he said, citing engineers who are working on hardware for the Apple project.”

“The main goal for Apple would be to get a piece of the $6.2 trillion Americans spend each year on goods and services, said Richard Crone, who leads financial industry adviser Crone Consulting LLC,” Kharif reports. “Today, the company pays credit-card processing fees on every purchase from iTunes. By encouraging consumers to use cheaper methods — such as tapping their bank accounts directly, which is how many purchases are made via PayPal — Apple could cut its own costs and those of retailers selling Apple products.”

Kharif reports, “Ed McLaughlin, chief emerging payments officer at MasterCard, said the company is ‘running the world’s fastest payment network, and that doesn’t need to be re-created.'”

MacDailyNews Take: Yeah, okey-dokey, Mr. Defensive.

Kharif continues, “Apple, based in Cupertino, California, is considering starting a mobile payment service as early as mid-2011, Doherty said. It would revamp iTunes, a service that lets consumers buy digital movies and music, so it would hold not only users’ credit-card account information but also loyalty credits and points, Doherty said. Using the service, customers could walk into a store or restaurant and make payments straight from an iPad or iPhone.”

MacDailyNews Take: Time for an eerie break:

This device, able to be made today with current technology, would easily be “The Device.” Running Mac OS X or a mobile variant, it would allow the user to communicate via text, audio, and video. It would snap digital photos and organize them, do email, and browse the web. It would sync automatically with your desktop or portable Mac… It would absorb the iPod by playing AAC / MP3 audio and interface with iTunes, but it would also play feature-length MPEG-4 movies, too, in full color… and any number of websites in your pocket. McDonald’s Drive Thru’s would accept payments via Bluetooth from “The Device.”SteveJack, MacDailyNews, December 10, 2002

Kharif continues, “Apple also could use NFC to improve how it delivers mobile ads to customers’ handsets and charge higher fees for those ads, Crone said. NFC would let Apple’s iAd advertising network personalize ads to the places where a customer is spending money. That could double or triple the ad rates that Apple charges, Crone said.”

“Apple has created a prototype of a payment terminal that small businesses, such as hairdressers and mom-and-pop stores, could use to scan NFC-enabled iPhones and iPads, Doherty said,” Kharif reports. “The company is considering heavily subsidizing the terminal, or even giving it away to retailers, to encourage fast, nationwide adoption of NFC technology and rev up sales of NFC-enabled iPhones and iPads, he said.”

Read more in the full article here.


  1. It’s back to the drawing board for the Android tablet makers. Just when they thought they caught up, they’re still skating to where the puck was. What’s RIM going to say about the PlayBook this time? It’s still ahead of the iPad 2. Yeah, good try.

  2. With all the rumors and such on the iPad 2…

    When exactly is the iPad 2 announcement press conference?
    Didn’t apple have the iPad press release at the end on Jan last year?
    I would think it’s coming soon, right?

  3. @ Backlash

    Apple announced the iPad last year on Jan. 27th and then it went on sale (wifi only) April 3rd.

    The original iPad announcement was over 2 months before it was released. This is VERY unusual for Apple, probably because it was an entirely new product.

    No one expect the iPad 2 press event to be 2 months before the iPad 2 goes on sale. It will mostly likely be 1-4 weeks before the new iPad goes on sale. So, basically we can expect the iPad 2 Press Event sometime in March.

  4. If there’s an Apple-run debit account I can top up, or even link to a credit card, I’m all for it.

    But no way in hell will I tie my bank account directly to it. I never use my debit card to shop, only credit card. Even my cable/internet auto-payments are done via credit card, rather than direct withdrawal.

    And yes I have the self-control to not go crazy spending, and enough funds to pay everything off each month

  5. The success or failure of NFC is in that last paragraph – the payment terminal.

    The Apple NFC Payment Terminal better be built to replace the current swipe and sign terminals or no one is going to buy in. Who would want ANOTHER/SECOND terminal on their counter for the occasional iPhone / iPad user who wants to use their iDevice to pay for a transaction.

    If they don’t have a major buy in before they release the tech on the masses, that will be a mistake. They need someone national – like Target or Sears to buy in before they announce this. They need someplace where you can actually use the tech from day 1, no matter where you live. And please do NOT make it Walmart!

  6. I for one welcome our new Apple overlords. ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    I’ll be interested to see what security precautions they use, and what kind of rates they will charge. Considering the amounts that the credit card companies are soaking the consumers and merchants (making a huge double-dip), there is plenty of room for competition!

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