Report: Apple Wants in on the Mobile Payments Biz
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.
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.