With NFC, Apple Most Likely to Take Mobile Payments Mainstream

Apple (s aapl) will introduce near-field communications technology (NFC) to the iPhone 5 and iPad 2 to be released this year, according to consulting firm director Richard Doherty (speaking to Bloomberg). Doherty cites engineers working on Apple hardware as the source of the information. The NFC tech will also bring mobile payments to the iOS platform, according to Doherty.

NFC is widely expected to make its way into future iterations of Apple’s mobile hardware, and since it’s already showing up in some competing Android devices (s goog), there is little reason to suspect Apple would pass on the technology, especially because it represents a major opportunity to capitalize on Apple’s existing success with digital transactions made through the iTunes and App Stores.

During Apple’s last conference call discussing its quarterly earnings results, the company revealed it made $1.1 billion in revenue through its combined music, movie, TV and applications sales in the first quarter of its 2011 financial year. While that represents only a relatively small portion of the company’s overall quarterly revenue ($26.74 billion), it’s still an impressive number on its own, and shows customers trust Apple when it comes to digital transactions.

Apple could easily use its existing relationship to become the payment method of choice for its mobile customers. I suggested as much back in November 2010 when I discussed Apple’s role in the evolution of mobile commerce, and again when I argued that NFC could lead to another power struggle between Apple and carriers. That Apple seems intent on bringing NFC to the iPad as well as to the iPhone (even if it is just the AT&T (s t) model, as Bloomberg’s report seems to suggest) only reinforces my belief that the company is gearing up for a major push into mobile payments. The combined reach of the iPad and iPhone, and Apple’s insistence that an active iTunes account be associated with those devices in order to download and use software give the company a massive head start in ushering in NFC-based e-wallet capabilities.

Currently, iTunes accounts are tied to credit cards, which could mean Apple would charge a convenience fee on top of the price of goods purchased, either from retailers or from consumers, to cover the costs. Were Apple to bypass credit card companies entirely and make it possible to link iTunes accounts directly to user bank accounts, like PayPal (s ebay) allows, then it could conceivably begin to make money on each transaction. Obviously, the 70/30 split it enjoys with developers in the App Store wouldn’t be feasible, but even if Apple only made enough through service charges to cover costs, the rewards it would reap in terms of perceived value add for consumers would help drive iPhone and iPad growth to new highs.

Mobile commerce is coming eventually, but its first major hurdle will be encouraging customer buy-in. When payments are at stake, consumers are slow to trust and twice-shy once burned. Apple already has more than 100 million people who trust it with their sensitive financial data, a payment system in place that’s comfortable and familiar for all of those users, and the infrastructure to back it up. If anyone is well-positioned to usher in the era of the e-wallet, it’s Apple.

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