We've previously reported on Square, the mobile payment system which turns your smartphone into a credit card scanner. While Square and its ilk make early adopter tech geeks drool, they're probably at best a few years off from making any sort of dent in the mass market. But a Bloomberg report today has it that mobile payments could be quickly slingshotted into the mainstream, thanks to support from Apple.
Per the report, the next-generation AT&T iPhone and the iPad 2 will be equipped with Near-Field Communication (NFC) chips, allowing them to transmit information at a distance of up to 4 inches, ideal for transactions but also potentially applicable to sharing photos, music, and other data. Arguably more elegant than Square's technology, which still involves swiping a physical, plastic card, NFC is nothing new -- Google's Nexus S has built-in NFC chips -- but what would be new is plugging it into a robust, trusted payments system: Namely, Apple's iTunes store.
MG Siegler summarizes:
Enter Apple. The technology giant does have a proven payment system. One with over 100 million accounts set up with built-in credit card access. But those interviewed by Bloomberg for the story suggest that Apple aims to go farther with NFC:
The main goal for Apple would be to get a piece of the $6.2 trillion Americans spend each year on goods and services, Crone said. 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.
And why would customers do that instead of using a credit card? Because a new piece of regulation may soon make it cheaper to pay via debit rather than credit. Apple could be in the right place at the right time with this.
(Bloomberg via Techmeme)