Richard Doherty, director of big consulting firm Envisioneering Group, tells Bloomberg Apple has NFC on the way. It is the latest in the long line of rumors speculating about Apple’s plans for a tech we’ve covered in depth. Here’s why this move could change everything about digital payment technology.
Near field comms are tiny, inexpensive systems that do pretty much what they sound like they do–transmit data wirelessly over a very short range. They typically use a flat spiral antenna that may be printed or punched out of foil, and they’re not in any way as fast at sending information over radio than your Wi-Fi system is. But their trick is the short range skills–it means that you can keep your metro pass safely inside your wallet when you pass through the turnstile at the station, or your ski pass in your pocket as you get to the ski lift gates, without having to get out a physical card that you’d slide through a magnetic card reader, or pass over a barcode scanner like you used to have to.
These systems have been used increasingly around the world, but the tech is ready to make a bigger leap: Add in the processor power of a smartphone behind it and instead of exchanging snippets of data to confirm you’ve paid your train fare, NFC can securely swap your credit card data to a secure terminal, accept loyalty points in return, and even download small ads or apps to your phone. This is just the beginning. Apple’s been patenting in this area, like mad.
Imagine having to merely plop your iPhone on an ATM’s sensor area to access your account–first you only have to carry one item (the phone) instead of also ferrying around your card. But it’s also potentially more secure, as you could use the iPhone’s sensors to verify your identity much more certainly than by tapping in a PIN–Apple imagines using the corner of the phone to sign your signature, with the moves measured by the phone sensors.
Then there’s shopping: An NFC phone could scan products equipped with NFC price tickets as you plop them in the basket, and then act as the payment method at the checkout–much as it would at the ATM. In a cleverer installation you may not even need to go to the checkout, as all the data handling could happen wirelessly as you walk out the store doors past a sensor bar.
How about tapping your iPhone against your NFC-equipped iMac to confirm your login identity? Apple’s thought about that too.
What about bumping two phones together, then tapping in a PIN to share your contact details, or even to lend a friend $10 to buy lunch? Could be done, too.
The other big thing to think about its penetration. NFC tech has been bubbling under the radar for ages, and has seen common use in Japan. But if Apple really does come through with the tech, it’ll have two amazing rocket-powered boosters to lift NFC into mainstream use: Apple’s seemingly endless brand cachet, and massive iTunes user card payment database. Apple sells tens of millions of iPhones per year, and recent T-mobile data suggests 10% of folks leaving its U.S. network do so to get an iPhone–and the app facilities the iPhone possesses versus dumbphones (Nokia’s also planning a big NFC onslaught) will enable really sophisticated wireless interactions.
Plus, unlike Nokia or Google with Android, the iTunes ecosystem–combined with Mobile.me–means Apple has tens of millions of users payment data already loaded into its systems all around the world. It could be relatively easy for Apple to persuade its users to let it use the data in a new way, and unlike Visa (which is also trying an NFC system, and getting some market traction) it has the hardware ready built to support the technological side of things–including security.
Essentially if consultant Doherty’s right, and Apple really does pull off this trick, it could change how you pay for everything. Because even if you don’t own Apple gear, the benefits to stores, advertising agents and phone owners themselves will be so obvious that NFC payments could quickly become the norm.
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