SAN JOSE, Calif. -- Apple Inc. is in discussions with retailers and contract manufacturers about supporting mobile payments on future iOS devices such as the iPhone5, according to one analyst. The company is one of several expected to deliver secure transaction services on mobile devices in 2011, according to a report in the January issue of EE Times Confidential.
"We don’t know Apple's plans, but engineers we have met are scaling up to support near-field communications, and have Apple's blessing but not a purchase order yet," said Richard Doherty, principal of consulting form Envisioneering (Seaford, N.Y.). "Apple also has been in dialog with its existing and new retailers" about a new mobile payment service, he added.
Doherty said Apple could decide to ship iOS products such as iPhones or iPads as early as this year using NFC to complete secure retail transactions using an extension of its iTunes service.
"Internally at Envisioneering, we are calling it iCash," said Doherty.
Apple could significantly lower the costs credit card companies charge retailers to verify and complete transaction, a major source of irritation for retailers. Such a service "could be a game changer," he said.
"Tens of billions of dollars that flow through Apple in the next several years" if it successfully launches such a service, he added.
Whether Apple does go ahead with a 2011 launch is unclear. "Anyone who says they have knowledge of Apple plans is a liar because Tim Cook and Steve Jobs won't decide until a few days or weeks before a product roll out," said Doherty.
Apple has a unique opportunity to popularize mobile payments as it has popularized mobile Web access and touch-screen technology. That's because it can control of some of the key elements such as handsets, the operating system and an online payment service needed to deliver mobile payments.
Word emerged last year of Apple patents that reference implementations of NFC. In addition, Apple reportedly hired an NFC specialist last year.
But Apple is far from alone. At the Web 2.0 conference last year,Google's Eric Schmidt showed NFC on the company's next-generation handset, suggesting mobile payments as one of its uses, and the chief executive of Research in Motion said RIM will support NFC.
Others are lining up partnerships and laying the technical plumbing needed to pilot secure mobile payment systems starting in 2011. A story in the current issue of EE Times Confidential described the history behind the emerging services and the elements players will need to ride this new wave of the mobile market.
Read the full story on mobile payments at EE Times Confidential.