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Payments? There's an iPhone for that

Posted: 09 Sep 2014 ?? ?Print Version ?Bookmark and Share

Keywords:NFC? wallet? iPhone 6? Apple?

Editor's note: The build-up for the launch of Apple's sixth-generation smartphone generated leaks, speculations and rumours. How big, how expensive, which features are left out, and what innovations are included!EE Times' Junko Yoshida singles out the incorporation of NFC and the deal Apple has struck with mobile carriers, banks and credit card firms as the biggest game-changer for iPhone 6.

As the drumbeat builds deafeningly towards Apple's launch of iPhone 6 (scheduled on Sept. 9), it feels as though the whole world has already seen the sonogram of Tim Cook's new baby.

Among all the leaks, speculations, and rumours we've heard about iPhone 6, the most interesting, in my humble opinion, is that Apple appears to be, at long last, folding Near Field Communication (NFC) technology into its newest gadgets!iPhone 6 and its new iWatch. According to the Financial Times, the word on the street is that NXP Semiconductors has won that NFC design-in slot.

However, the fascinating aspect of NFC in the iPhone 6 is not so much the technology itself. We know how NFC works!both for mobile payment and its simple pairing ability. In fact, more forward-looking companies, including Korean giant Samsung, integrated NFC in their smartphones and peripherals years ago. But curiously, Apple remained a staunch holdout.

The bigger game-changer, in my mind, which the introduction of iPhone 6 is expected to bring, is a breakthrough Apple has negotiated with mobile carriers, banks and credit card companies.

Apple will be telling financial institutions!for the first time, for a tech company!what it wants in its own mobile wallet business model, instead of getting ignored or pushed around by banks and credit mills whose business is to preserve their own archaic systems and reap the small margins they set up for every transaction fee.

Many software and hardware companies in the high-tech industry have dreamed of mobile wallets for a long time!maybe as long as two decades.

Bill Gates talked about it. Companies like Nokia, Philips Semiconductors (before it became NXP Semiconductors), and Sony subsequently formed the NFC Forum to promote NFC as the key to enable mobile payments.

I even remember covering, at the Cartes IT and security exhibit here back in 2004, Nokia's new NFC-capable mobile handset, a triband camera phone with an NFC "shell" attached. The NFC shell contained Philips Semiconductors' NFC chip, interfacing with NFC radio while directly communicating with a base band processor in the Nokia handset. Well, that was before the smartphone was invented.

Developing NFC technology to enable mobile wallets was the easy part. The tech community created the standard. Semiconductor companies are pumping out NFC chips, and OEMs are integrating them.

Breaking down the wall

The hardest part for tech companies to bring the mobile wallet to Main Street has always been breaking down the brick wall built by banks, credit companies, and mobile operators that cling like barnacles to their own, well-protected businesses.

How and why mobile commerce hasn't happened the way some leading electronics companies originally envisioned is well chronicled in a book, Mobile Commerce 2.0 by my former colleague Majeed Ahmad. (Ahmad was once editor in chief at EE Times Asia.) As the book's subtitle notes, the book is about "Where Payments, Location and Advertising Converge."

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