The NFC contactless technology is still not gaining the runaway momentum many predicted for 2012, partly because Apple remains cautious on adopting the system .
Reports claim that the firm is interested in incorporating NFC ‘ which enables swipe-based payments as well as other applications like ticketing and data exchange ‘ in the next iPhone, but wants to monitor others’ efforts first. In particular, The Wall Street Journal’s sources say, it is cautious about possible security implications. The report says CFO Peter Oppenheimer has asked whether there might be a secure internet technology to use in place of NFC, while worldwide marketing chief Phil Schiller is worried about fall-out, should consumers experience any security or privacy breach or other bad experience associated with NFC. Apple’s head of iPhone software, Scott Forstall, is also said to be concerned about the impact on battery life.
For all these reasons, it is possible that the iPhone 5 will debut with Bluetooth rather than NFC for payments. While Google has its Wallet and Microsoft is expected to follow suit soon, Apple will not enable payments via the iPhone until it is more certainly about security. In the meantime, it will launch its Passbook system with iOS 6 this fall, providing an integrated app to hold all a user’s tickets, boarding cards and other such documents, which can then be accessed from the homescreen. However, there is currently no option to link this to payment cards.
Piper Jaffray analyst Gene Munster believes Apple is rarely in a hurry to be the first to market, but likes to learn from others’ mistakes first, as it did in MP3 players and even handsets.
Meanwhile, digital payments specialists like PayPal have also been cautious about NFC, seeing it as just one option among many mobile commerce choices. And m-payments start-up Square claims not to be worried about NFC. Its popular offering uses a detachable dongle on a handset to swipe a credit card and unlike NFC, does not require significant new equipment at the merchant site. The firm’s CTO Bob Lee told the MobileBeat 2012 event that replacing a wallet with an NFC-enabled handset does look attractive, but that retailers will be unwilling to invest in terminals until they are more sure of customer acceptance.
He added that NFC was “a solution in search of a problem’, saying: “With NFC, you have to take your phone out of your pocket, unlock your phone, possibly enter another pin, and then wait for it to beep. What’s the value proposition there?”