By Jim Karpen on Mon, 05/12/2014
Brightwire, a global investment newswire, reported last week that the iPhone 6 will likely include a Near Field Communcation (NFC) chip, a chief purpose of which is using one's phone to complete point-of-sale transactions. You simply tap the NFC terminal at the checkout counter to make a purchase. According to the report, which is based on "a source close to the matter," the impetus for this move appears to be a deal Apple has made with China UnionPay, which Brightwire describes as "the only domestic bank card organization and interbank network in China." In short, if you want to sell lots of iPhones in China, and if the only bank card company wants NFC, then Apple does NFC. The two companies are also reportedly working together on a mobile payment system for use in Apple Stores in China.
In the past Apple has resisted NFC, saying, "It doesn't solve a problem." Apple doesn't include bells and whistles that they don't think will improve the user experience. And so far, consumers in the US haven't shown much interest in NFC transactions, especially since it's so easy to simply whip out a credit card. NFC was rumored for the iPhone in the past, but instead Apple came out with Passbook, which uses Bluetooth instead of NFC and is more versatile. The Brightwire report says that the implementation in China will still involve downloading an app to use with Passbook, but apparently NFC will be used to complete the transaction.
Earlier reports said that Apple filed an NFC-related patent in the US in January, so that makes this rumor a bit more credible. Still, Apple's iBeacons continues to be implemented by many enterprises, and it's hard to imagine that Apple would come out with an NFC-based mobile payment system rather than one based on iBeacons. Perhaps the phone will include an NFC chip, but mainly for use in China, whereas in the US they'd use iBeacons.
If Apple does indeed embrace mobile payments, they will likely do it right, and it could be just the boost that's needed to get mobile payment systems off the ground in the US. Quite a few Android phones come with NFC, but people simply tend not to use it. When I tried using NFC via my Google Nexus 7 tablet to make a purchase using the $25 credit that came with the device, each place I went said, "No one's ever tried to do this before." And in each place it didn't work because there was no local wireless network, which was necessary for the transaction to take place. I ended up just using the option of having Google send me a check for $25.