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Editor’s Note: Apply Pay is here! And you can read all about it in our recently published article on Paying with Your Phone.
A new payment method is in the works, with many of the big names on board, including Google and AT&T. The technology aims to make the check out process easier by allowing consumers to pay for purchases with their cell phones using a technology called NFC.
What is NFC?
NFC stands for Near Field Communication, which is a way of transmitting data. It comes in the form of a chip, which can be placed inside a mobile phone or other device. Many companies, most notably Google, have been promoting NFC as the new form of payment for the 21st century. Their goals are lofty, with Google predicting that Google Wallet will replace most, if not all, of the cards in your wallet.
NFC has been in place for years now in Japan. The Japanese use their phones for everything from paying at a vending machine or a store to interacting with their TVs. Their system works a little differently than Google Wallet and other payment options coming to the U.S., however: the charge is added on to your cell phone bill. You can read all about it and other Japanese technologies here.
But will the iPhone have it?
Debate has circled back and forth about whether the fifth iPhone, or iPhone 4S, as it’s being called, will have an NFC chip. Different news reports have come out, some saying that it will, and others saying it won’t. As of this writing, Apple still has not announced whether or not the iPhone 4S (or whatever it ends up being called) will have NFC. The latest guess is that it won’t. A recent report from Bernstein Research is behind this hunch, saying that Apple’s newest release will not include an NFC chip.
That doesn’t mean that the iPhone can’t use NFC payments, however. Third party manufacturers may create an NFC attachment for the new iPhone. Visa and Wireless Dynamics have already teamed up to create the iCarte for the iPhone 4, which it has been testing in Europe. This device attaches onto the bottom of the iPhone, much like an extra battery would. You can see pictures and other information here.
If Apple gets on board with the idea, we may begin to see NFC functionality on the iPhone 4S. Isis, an upcoming payment system supported by both networks that carry the iPhone, will likely come to the new phone before Google Wallet does. Google will want to take advantage of the opportunity to grow Android market share through its new app.
Where can I use NFC?
Unfortunately for iPhone users, NFC will probably be out on Android devices before it comes to the iPhone. Google Wallet is already gearing up for its release, when it will be available on Sprint’s Nexus S 4G for use with Citi credit cards. Google Wallet has already partnered with several merchants, including Subway, Walgreens, and Jamba Juice. Isis hasn’t yet announced its partner merchants, but features a short video clip on its website showing a woman using her phone to pay at a subway, a supermarket, and a coffee shop.
The future of payment?
Some think that NFC will become mainstream, with everyone using their cell phones to pay. While this may happen eventually, don’t expect it anytime soon. Most people will not see the capability until at least 2012, with many others choosing to hold off until the system has proven itself, like that friend you have who still uses a flip phone. It will probably take a while for the system to catch on, so even if you do get NFC capabilities on your iPhone, don’t leave your cards at home.