Apple Readies iPhone, iPad for Mobile Payments

Will the next-generation iPhone let you make payments on the go?

(Credit: Apple)

Consumers may soon be able to pay for items on the go directly through their iPhones or iPads. Apple is reportedly working to outfit the next generation of its smartphone and tablet with near-field communications (NFC) technology, which would let consumers use the devices to make mobile payments as an alternative to cash and credit cards, according to a story today by the Bloomberg news service. Richard Doherty, director of the technology consulting firm Envisioneering Group, told Bloomberg that both the iPhone 5 from AT&;T and the iPad 2 would likely include NFC chips, citing engineers working on the project.

NFC technology lets devices exchange information over a short distance--no more than four inches. As such, a mobile device equipped with NFC could send payment information from a bank account to a register or terminal, allowing people to use them to pay for items and services at stores, restaurants, and other types of retail outlets.
Apple has apparently been eyeing NFC for for some time. Last summer, the company hired an expert in NFC to join its mobile commerce team at the same time it reportedly was already testing the inclusion of the technology in its next iPhone.

Beyond the benefits to consumers, companies like Apple stand to gain from NFC, notes Bloomberg. Like any business that accepts credit cards, Apple currently pays processing fees on every iTunes purchase made through a credit card. By letting people pay for iTunes content on their iPhones via NFC, Apple could cut out the Visa or MasterCard middleman and trim its own expenses. For tech users, the new technology could also help them more easily transfer and share files and settings between their NFC-equipped smartphones and other devices, such as PCs.

Other players have also gotten into the act. Last November, AT&T Mobility, Verizon Wireless, and T-Mobile announced the creation of a new mobile payments network that would use NFC. Google soon followed up that up with the launch of its Nexus S Android phone packing an embedded NFC chip and with support for the technology in Android 2.3, aka Gingerbread.

On its end, Apple is currently looking into launching a mobile payment service as early as the middle of this year, Doherty told Bloomberg.

Is iPhone Getting GSM/CDMA Chip?

The iPhone's ability to make telecom issues become mainstream topics is extraordinarily. The most recent topic is whether the iPhone 5 will incorporate a GSM/CDMA chip that would enable users to choose their carrier of choice. A source recently suggested that Apple had chosen Qualcomm over Infineon for that reason. Most recently, AppleInsider reports that an Italian hacker has found proof of Qualcomm baseband chip support in the iTunes software.

There was a debate regarding multi-mode chips a year or two ago, of the kind that would support all kinds of networks and frequencies. Ever since that debate, Apple fans that was waiting for a Verizon iPhone put their faith in such a chip. It recently turned out that while the Web was debating multi-mode chips, Apple and Verizon Wireless were busy building the Verizon iPhone with a common chip.

The Verizon iPhone will be released on February 10. Could the iPhone 5 with a multi-mode chip as described above be released a few months later? Most likely not. How about a dual-mode GSM/CDMA chip with frequency support for all American carriers then? Well, T-Mobile recently said that while they wanted to offer the iPhone, they weren't going to get it anytime soon.

Of course, that either means the iPhone 5 will not support T-Mobile's AWS 1700 MHz frequency for HSPA+ connectivity, or it means that it will, but T-Mobile didn't want to spill the beans too early. Sprint recently had no comment when asked whether they would soon offer the iPhone.

However, while some Apple fans think that the company they love above anything else will somehow shake up the U.S. telecom industry in a way Google didn't, the reality is that the iPhone has had the opposite effect. It's the ultimate tool for carriers to maintain order in the masses.

So, if you are an Apple fan, you should desire a 4G-equipped iPhone 5 above anything else, because regardless of what kind of chips it has, it's not going to give you more freedom.