Rumor: Apple developing iPay as the next iPhone becomes your iWallet

By , May 3, 2012

Yeah, I know analysts promised us flying cars many times before, but bear with me for a second. In addition to opining that the time is not right for an Apple-branded television set until 2014 due to dire economic conditions, the same credible analyst also advised clients that a mobile payment platform from Apple is to be expected.

He calls it iPay and guesstimates it’ll work with NFC technology believed to be in the cards for an upcoming iPad and iPhone hardware refresh…

The analyst is “more optimistic” that Apple is developing a mobile payment solution of its own. He thinks it’s going to be marketed under the iPay moniker and require future iPhones and iPads thought to implement the necessary near-field communication (NFC) technology.

NFC technology lets mobile devices talk to each other over short distances, using radio waves. One simply touches two NFC-enabled devices together in order to, say, confirm the payment, exchange contacts and photos and other items.

According to AppleInsider, Moskowitz wrote this morning in a note to clients:

Currently, we do no have any evidence of an iPay platform in development, but it is our view that the company’s current Apple Store app that enables consumers to check themselves out of an Apple Retail Store could be the stepping stone.

Though it’s just a speculation at this point, but it has its merits.

True, it doesn’t seem like iPay will make a whole lot of sense on iPad. That said, mobile payment capability undoubtedly sounds like a natural progression of the feature set folks have come to expect from their iPhones.

It’s not a question of ‘if’, but ‘when’.

We know Apple’s been hiring NFC experts and they filed several patents detailing a digital wallet on portable devices. Recently, the United States Patent & Trademark Office granted the company a key patent for iWallet.

And if multiple reports from sources like The New York Times and China Times are anything to go by, the next iPhone will feature NFC technology.

Also important – Apple owns premium customers who spend money via iTunes and willingly entrust club Cupertino with their credit card information and confidential data.

The iTunes ecosystem is huge. Last month, Apple revealed it had a whopping 200 million credit card-enabled accounts on iTunes.

This makes the popular online store the biggest credit card hub on the web.

Adding mobile payment functionality that extends outside the confines of digital content purchases on iTunes is a no-brainer.

Tapping iTunes credit cards and the more than 365 million iOS devices in the wild, Apple’s iPay should take off in an instant.

But what about financial institutions such as credit card companies, banks and payment processors? Apple currently partners with these guys and covers credit card transaction fees incurred with each iTunes purchase.

However, the money guys are unlikely to hand over point-of-sale processing to a middle-man. On the other hand, Apple did disrupt some pretty powerful industries and bankers could be easily next for a sprinkle of Apple magic.

And while Google was the first to crack mobile payments with their Wallet thing, Apple is best poised – in my opinion – to simplify and mainstream this technology.

I can certainly see myself paying for groceries just by waving my iPhone.

Would you trust Apple with your expenses or perhaps you’d rather use good ol’ plastic?

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  • http://twitter.com/Dongiuj DonGiuj

    In Japan they have had a wallet built into their mobile phones for years. It’s very common to see people paying for things in the local 7/11 and paying for their train fares by swiping their phones on the cash register/ticket machines. It could help apple boost their sells even more than they have already amazingly have there. I personally have no need for this so I hope apple make two different models to cater for everyone. I don’t want to pay for a phone that’s going to be advertised for something I and many other people most probably don’t need.

    • http://www.facebook.com/nicholas.somerville1 Nicholas George Somerville

      Actually, in japan we are paying with our pasmo cards, it looks like a credit card. It is more of a bus pass system that they just so happen to put in stores and stuff. Just saying.
      Sources- 4 years living in Japan. But just in case I’m wrong I’m going to go ask around for this paying by phone , because I’ve never heard of it.

      • http://twitter.com/Dongiuj DonGiuj

        I’ve been living in Japan for a long time. I know the cards you’re talking about but this is different. I’ve seen people placing their phones on the cash registers and just walking through the ticket machines at the train station doing the same thing almost everyday for the past…3 years, I think. Maybe 2 years, I can’t remember exactly. What part of Japan do you live in? Is it a city or rural area you live in? I’m not being funny when I asked that, there could be a bigger demand for it in the big busy cities which might explain why you haven’t seen people using those phones.
        Hope you’re having a good golden week bud.

    • http://twitter.com/_andyfox_ Andrew Fox

      I think we all have to get used to the fact that cash and credit cards have limited time left on this planet. The ultimate payment system will not be a phone, but it is as good as we can do right now. Need? Perhaps not. Want? Maybe when we all see how it simplifies payment, as well as the contents of our pocket.

      As for two different models, not very Apple-like. Besides, if you don’t want to use a feature in todays iPhones, you just don’t use it, right?

      • http://twitter.com/Dongiuj DonGiuj

        I guess you’re right…

  • http://twitter.com/shibinfp Shibin Fazil

    PayPal has already come with such payment option including the device which can connect to the iPhone head phone jack. I am not sure that is NFC though!

    • Aaron de Silva

      Are you referring to the device in the picture?

      • http://twitter.com/shibinfp Shibin Fazil

        No but similar to that PayPal has introduced one.

  • Anonymous

    With all the support Apple has given Square by letting their device be sold at Apple Stores, I don’t think it’s very likely for Apple to be planning on doing this.
    I think Square and Paypal are figuring out very good ways to do this and keeping credit cards fees low (and lower and lower with time) while still using iPhone and iPad.
    This really leads me to believe Apple wouldn’t want to do it on their own but who knows.

  • Anonymous

    Isn’t iPay exist long ago since Apple started making products that are extremely expensive