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Ivan's picture

Apple to introduce mobile payments with iPhone 5S

Several sources indicate that the production of iPhone 5S has begun and we have an idea about the hardware expected to launch too:

  • 4-inch IGZO Retina display
  • A6 processor clocked a bit faster than the iPhone 5
  • Quad-core SGX 554MP4 graphics
  • 2GB RAM
  • Upgraded LTE radio
  • 12MP camera
  • Dual-LED flash
  • NFC
  • Fingerprint scanner

The most interesting are the last two items.

As usual S upgrades on the iPhone keep the form factor unchanged and introduce an interesting new feature that may compell some customers to upgrade. The iPhone 3GS introduced video recording and the iPhone 4S introduced Siri. It is likely that the iPhone 5S will introduce mobile payments.

NFC credit card readers are available in many places around the world and several Android phones have NFC capabilities for payments. It feels like the world is ready for mobile NFC payments and it's the right time for Apple to introduce such a feature on iPhones.

Apple will probably update Passbook to support credit, debit and membership cards of all kind. It is possible it will rename Passbook to something like iPay or Passpay to reflect the new functionality. Quick authentication will be possible with the built in fingerprint scanner. Since many users already have their credit cards associated with their Apple ID accounts they would not even have to enter the credit card details into Passbook. The card will show up in Passbook by default.

To pay you will have to start Passbook, authenticate yourself by placing your thumb on the home button, select the card you wish the pay with if you have more than one, and finally put the phone close to the card reader. The payment will be immediate and a sound effect with an animation will give you audio-visual feedback to confirm it. You will not have to enter pin numbers or sign any receipts. Payment with the iPhone 5S will be a similar experience to paying with a card you currently keep in you wallet but somewhat more secure and faster because of the quick fingerprint authentication.

Many possibilities besides mobile payments were theoretically available to Android users for quite some time but the small user base slowed the acceptance of NFC. Apple will take the technology mainstream and many businesses will suddenly feel the need to satisfy customers eager to take advantage of the small conveniences offered by NFC enabled phones.

Car and house keys will be replaced by apps on mobile phones. Passbook together with NFC will allow people to use mass transportation, enter the gym and shop at Costco. People will exchange business cards virtually when both parties have NFC capable phones.

The mobile phone already replaced many objects we used to carry around. We don't have notepads, address books, cameras, dictaphones, iPods, books and laptops in our bags anymore. Soon we will be able to leave our wallets, business cards and keys at home as well.

It goes without saying that without sure data this is speculation and what Apple will actually release later this year remains to be seen.

Commenting on this Blog entry will be automatically closed on September 12, 2013.

Ivan's picture

New patent suggests the fingerprint reader could be on the screen instead of the power button:

steveballmer's picture
653 pencils

Zunes could do this years ago, big deal>
I am not Steve Ballmer pretending not to be me!

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