Apple is moving toward the mobile wallet world with its next iPhone. The technology giant has partnered with retailers, banks and major payment networks to make it happen, according to a Bloomberg report.
Bloomberg cited “a person familiar with the situation” who said that Visa, MasterCard, and American Express are among the big names working with Apple to enable a new mobile wallet feature on the iPhone 6. The device will make its first appearance at a Sept. 9 launch event.
“The new iPhone will make mobile payments easier by including a near-field communication (NFC) chip for the first time, the person said,” Bloomberg’s Matt Townsend reported. “That advancement along with Touch ID, a fingerprint recognition reader that debuted on the most recent iPhone, will allow consumers to securely pay for items in a store with the touch of a finger.”
New Life to NFC?
Apple is somewhat late to the mobile wallet game, a nascent yet rapidly growing industry. Companies already offering mobile wallets include Google, Citigroup and Macy’s.
Apple could not immediately be reached for comment, but according to NXT-ID, a biometric authentication company behind a smart wallet called Wocket, Apple submitted a public patent application that describes a detailed backend architecture for a mobile wallet designed to hold digital credit and debit cards and coupons from a range of merchants and financial institutions.
“The filing describes the system as capable of powering mobile transactions conducted via QR codes, the cloud, and contactless NFC," the firm reported. “It's also explicitly engineered to handle large bursts of traffic, such as can occur on a so-called 'launch day' of a client device."
According to a detailed review by research service BI Intelligence and independent experts, the patent application describes an "omni-wallet” that allows other parties to securely send data to Apple device owners leveraging sophisticated encryption and secure hardware to prevent fraudsters from intercepting or duplicating sensitive information such as digital credit cards.
We caught up with Greg Sterling, Vice President of of Strategy and Insights at the Local Search Association, to get his take on the rumors. He told us it was previously thought that Apple was permanently shunning NFC technology.
“If these reports are accurate it could and likely will give new life to NFC as a payments standard in the U.S. Ironically by embracing NFC, Apple might also reinvigorate Google Wallet, whose NFC-based offline payments have languished because of consumer apathy,” Sterling said. “Bluetooth/beacons can also be used as the basis of payments. It was previously thought that's what Apple would be ‘banking on,’ so to speak. September 9 will tell us more.”
Mega Mobile Wallet Market
The mobile wallet market is set to grow to $5.25 billion by 2020, according to market research firm Allied Market Research. That’s based on a compound annual growth rate of 127.5 percent from 2013 to 2020. Allied attributes growing awareness of mobile wallets and their applications, rising smartphone penetration and stronger security as drivers.
"The mobile wallet market is witnessing growth globally with increasing adoption of mobile payment services. Asia Pacific is expected to be the fastest growing region for the mobile wallet market, during the forecast period followed by EMEA," said Allied analysts Lita Person and Saurabh Saxena.
"The lack of regulations and monitoring for mobile-enabled payments in African countries has triggered the mobile wallet market growth in the region, whereas reluctance of merchants in Asia Pacific countries such as India, temporarily has hold the growth, which in turn will prompt the much faster adoption in future," according to the analysts.
Launch Event 9.9.14
Apple's 1-hour launch event starts September 9 at 10 a.m. Pacific time, 1 p.m Eastern today, at the Flint Performing Arts Center in Apple's hometown of Cupertino, California. The event will be live streamed on Apple's site and you can check back here throughout the day and all week for ongoing coverage and reactions.