Apple Inc. increased speculation that it plans to develop an NFC-enabled iPhone with its hiring this month of mFoundry executive Benjamin Vigier, who has played a key role in developing mobile payment applications for PayPal Inc. and Starbucks Corp.
While Apple Inc. has never publicly stated its intentions to enter the mobile-payments space, observers believe an NFC-enabled iPhone is imminent based on several of its recent actions.
Apple appointed Vigier product manager for mobile commerce, according to a published report in NFC World, suggesting the company is readying plans that would turn its handsets into mobile payment devices.
Vigier developed PayPal’s mobile service and Starbucks’ barcode-based mobile payments system while working at mobile payments company mFoundry (
In addition to staffing a mobile commerce unit, technology blog TechCrunch reports Apple already has built NFC-enabled iPhone prototypes using chips from NXP Semiconductor.
Apple also has filed patents related to NFC technology and an iPhone application that would initiate mobile payments.
Apple integrating NFC with its hardware “has been anticipated for quite some time now,” says Red Gillen, a senior analyst with the banking research firm Celent.
Todd Ablowitz, president of Double Diamond Group, a Centennial, Colo.-based consulting firm, believes an NFC-enabled iPhone will be available next year.
Apple, however, will still need to figure out its place in what has become a complicated business model for NFC.
The technology’s primary challenge has been determining how to divvy up transaction revenues among the card brands, issuers, mobile operators and handset manufacturers.
Apple’s entrance into the conversation changes the game because “they’ve been so incredible in reinventing business models,” Ablowitz says.
He believes Apple can change the payments business model in a way that could cause quite a disruption. Payments “is arguably inefficient in terms of the value chain, it’s got entrenched long-term players, it’s got technology disruption ripe to happen and it’s an ecosystem where a leader could make big gains,” Ablowitz adds.
Apple could revolutionize payments in some of these ways with something such as an “iTunes wallet,” Gillen suggests.
ITunes is Apple’s proprietary digital music player application. Consumers can buy music from the iTunes story without having to enter credit or debit card information after an account is set up.
Apple most likely will incorporate the iTunes model into an NFC iPhone application, Gillen speculates. Apple has filed a patent around this concept.
Consumers could use the iTunes wallet to pay for goods at the point-of-sale. “That’s a big deal because you’re competing with a lot of established players” in the payments ecosystem, Gillen says.
Indeed, Apple could have made that point moot had it acquired POS terminal manufacturer Vivotech Inc. (
Apple, however, still should be able to find a way to enter the brick-and-mortar environment because retailers are clamoring for mobile-payment products, Ablowitz says.
“Retailers feel like they’ve been abused in acceptance in payments for many years,” he says. “[Retailers} expect to benefit from this technology. They will be very active in the conversation and use their clout to meet their objectives.”
Apple is not only interested in NFC payments. The company also has filed a patent for a marketing and promotion engine it would maintain, Gillen says.
“People could use the phone to look up the most optimal price on goods and look up discounts and coupons,” he adds.
Apple implementing the NFC technology in the iPhone will be the least of its concerns, Gillen says.
“How the iTunes wallet works or how the promotional stuff works is going to be the bigger question,” he says.
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