After years of ignoring Near Field Communications, or NFC, Apple appears to readying the technology for the iPhone 6. Sources told Wired on Thursday that NFC will be in the next iPhone, expected to launch on September 9 and on Friday, more details emerged: Financial Times reports that Apple is working with NXP, one of the leading NFC chip companies that already provides wireless chips for Android phones.
The NFC in an iPhone rumor has surfaced on a nearly annual basis for the past four years. So why now might it become reality? Two reasons spring to mind, although I have no inside knowledge of Apple’s plans; these are just my (hopefully) logical thoughts.
First, the card payment industry in the U.S. is woefully behind other parts of the world. Go to Europe or other overseas regions and you’ll find more advanced and more secure payment card techniques, such as “chip and PIN.” This requires a programmable chip with identifying information in the credit or debit card; similar to a SIM card in a phone. The PIN aspect is an additional layer of security, requiring customers to enter a unique code to complete the transaction while verifying the card presence at the terminal.
Point of sale terminals overseas are obviously equipped to handle this type of two-factor payment, known officially as EMV, which stands for the three companies that developed it: Europay, MasterCard and Visa. Stateside, we’re not there yet. However, some payment processors are preparing for a change to the system.
Square, for example, is already prepping a new reader to handle payment cards with a chip in them, and many of the bigger payment terminal makers have introduced EMV in their newest U.S. products. The payment industry here is ripe for a change to advance the level of security that credit and debit cards provide; meaning now is a good time for Apple to make use of the more than 800 million credit card accounts it has through the iTunes store.
With such clout, I wouldn’t be surprised if Apple has had discussions with the major credit card payment processing companies to help steer the direction of advanced mobile payments and the terminals required for them. Note too that NFC and EMV can work hand-in-hand to provide a contactless, more secure payment transaction.
Bear in mind also that there are also thousands of NFC or tap-to-pay terminals in the U.S. already. Even where I live in a fairly rural area of southeastern Pennsylvania, a quick search turned up 20 different merchants that have MasterCard PayPass terminals within a 5 mile radius of my home. Check your own location here and you might be surprised by availability.
There’s more to NFC than payments though. An oft-overlooked use of NFC is tap to pair. This is super useful when pairing two devices over a wireless connection, such as Bluetooth. It’s great for pairing wireless headphones or speakers to a phone, for example. And wouldn’t it be helpful to pair, say a wearable device, with your iPhone; perhaps an iWatch, which is also widely expected on September 9?
It would be and it fits in with the simplicity and elegance of an Apple product. There are no PIN numbers to enter on a Bluetooth device with NFC: You can simply start the pairing process on a phone and tap the two devices together to establish the pairing connection. No muss, no fuss.
It will be like magic for the mainstream consumer that hasn’t yet seen how NFC makes life a little easier. So too will wireless tap-to-pay features in an Apple wallet app for the iPhone 6. And isn’t that what Apple tries to sell with its products: easy to use technology that appears like magic?