There is a technology that has been gaining traction as of late that will basically allow you to use your smart-phone just like your wallet. You will no longer need to carry a credit card to pay for services at merchants that have point-of-sale systems capable of handling NFC (Near Field Communication) transactions. Instead, all you will have to do is carry a phone with an enabled NFC chip, and you will will have the power of your wallet in your phone.
NFC Transactions
The idea behind NFC transactions started in the early 1990s, and was often linked to Bluetooth technology. John Dvorak of PC Mag.com describes it as a personal area network that would recognize your device, alerting you to special sales or events in close proximity to where you were currently located. Transactions would happen automatically, and there would no longer be a need for cash transactions again. He faults the marketing of such a process, not the technology itself for the reason it never took off in the US.
Why Apple?
One major advantage Apple has in implementing a NFC chip in the next generation iPhone is that they already have over 160 million active iTunes accounts. These accounts all have credit card associated with them that customers already use to purchase apps, music, book, and hardware. Apple can conceivably cut out the middle-man much the same way PayPal already does. The only preparation they would need to do is include the NFC chip in their next iPhone, which they are already rumored to be doing.
Is a NFC Enabled iPhone Good for the Consumer?
Let’s face the facts here-in the US we have typically been slow to adopt/embrace NFC technology. As individuals, we will still need credit cards and cash in our everyday lives regardless whether or not our iPhone is capable of making our payments for us in the near future. Merchants will most likely be added slowly as the technology evolves. There is also the trust, or lack there of, that has many individuals concerned. Can I accidently purchase something I didn’t intend to buy? Or even more concerning might be the implications if I lose my iPhone.
The most useful element that Apple and their 160 million iTunes accounts might be able to provide the consumer is the ability to leverage that incredibly large and loyal customer base to influence how quickly merchants adopt the technology, and even how much a merchant might charge for a transaction. If such a technology was available today, would you embrace it if it was built into your next iPhone?
References
John C. Dvorak “iPhone Users Are About to Be Screwed Over” PCMag.com
Jaikumar Vijayan “Apple Could Disrupt Mobile Payment Industry, Analyst Say” ComputerWorld.com
Lance Whitney “Report: Apple readies iPhone, iPad for Mobile Payments” CNET News
