A collection of recently published patents and a new hire at Apple suggest that future iPhones may carry built-in features to replace your credit cards.
Apple recently hired Benjamin Vigier as a product manager for mobile commerce. He’s an expert in near field communication (NFC), a technology that enables devices to exchange information wirelessly over very short distances. It’s the kind of technology that credit card companies have been touting (without much success) recently, where instead of swiping a credit card, you just wave a card or key fob in front of a reader. According to his LinkedIn profile, Vigier formerly directed and developed mobile payment solutions for PayPal and Starbucks.
In addition, Apple in recent months published several patent applications that portray NFC-based hardware and software features utilizing mobile payments for concerts, sports venues, airline ticketing and more.
Apple did not respond to a request for comment.
A growing number of businesses have been eyeing mobile payments as an alternative to credit cards. Earlier this month, Bloomberg reported that Verizon, AT&T and T-Mobile were planning a joint venture to form a mobile payment system competing with Visa and MasterCard. Such a move would presumably reduce costs to merchants, who are typically charged 3 percent of the purchase price when customers pay with a credit card.
However, as Wired.com’s Eliot Van Buskirk earlier reported, a mobile payment system would face difficulty breaking into the mainstream. In order for mobile payments to gain widespread adoption, merchants would have to purchase new readers, estimated at $200 per unit, and they’d have to be convinced that a large number of customers will be using the new payment system.
Also, a new mobile payment system would raise security concerns. A location that frequently performs wireless transactions would become a prime target for hackers and snoopers. One reason credit cards have been so successful is that they rely on leased lines and dedicated networks, which ensure reliability and security, according to Aaron MacPherson, IDC Financial Insights practice director for payments and security.
“Even if you’re using a mobile phone network, you do not want to be in a situation where you can’t pay because there’s no 3G signal … and the internet is susceptible to brownouts and denial-of-service attacks. It’s notoriously insecure,” MacPherson told Wired.com. “I don’t think either of them can substitute for the card networks.” (Reprinted from Wired.com)