Apple to Introduce NFC Service on iPhone

Apple-to-Introduce-NFC-Service-on-iPhone

Apple is set to introduce “Near-Field Communication”, a technology that will allow users to shop with their iPhones and iPads.  NFC is a technology that enables a device to transmit and receive information up to a distance of 4 inches.

Richard Doherty, director of consulting firm Envisioneering Group, has said that NFC-based services will be included in the next update of the iPhone for AT&T and the iPad 2 later this year.

Apple has the added advantage of possessing a large financial database containing user credit-card numbers, iTunes gift-card balance and even bank data. This data can be easily synchronized to work with NFC-based services. Taylor Hamilton, an analyst at consultant IBISWorld Inc, feels that the introduction of NFC-based services on Apple devices has the potential to turn Apple into a big ticket e-commerce player.

The introduction of NFC-based services will give Apple Inc. an opportunity to participate in the $6.2 trillion a year goods and services market in America. Additionally, Apple could potentially save big on credit card processing fees and other overheads by offering a direct bank debit facility to its customers once the NFC-based services are in place.

Not to be left behind, large credit card companies like Visa and MasterCard and online merchants like PayPal are also preparing for the introduction of NFC-based payment services. MasterCard Inc. has already started NFC payment trials in many countries across the globe.

One of the major reasons for the adoption of NFC by Apple seems to be the competition; a number of Android-based devices like Samsung’s Nexus S phone already have the ability to read NFC tags. Also, mobile phone giant Nokia has been pushing for the adoption of NFC for a long time now.

Apple Inc. also plans to setup its own mobile payment service by mid 2011. Apple plans to marry its popular iTunes service to the NFC-services that it plans to introduce. This will give Apple customers the ability to shop with their iPhone or iPad devices making use of credit cards or bank accounts linked to their individual iTunes account.

Apple could also use NFC services to upgrade its iAD advertising network by sending mobile ads specific to individual user preferences. This could lead to a substantial rise in the ad rates that Apple charges currently.

Apple has already created a prototype payment terminal which will be able to interact with NFC-enabled iPhones and iPads. Apple is expected offer a deep discount on the terminal’s price and may even distribute it to retailers for free so as to ensure smooth and quick nationwide NFC adoption.

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