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Rumors have again surfaced that Apple (Nasdaq: AAPL) will incorporate wireless payment technology into its next iPhone design.
This time, it's being reported that the technology -- near field communications, or NFC -- will also be included in the forthcoming iPad 2.
Several banks have already tested wireless payment capabilities with the iPhone 4 and other smartphones together with Visa (NYSE: V).
Android 2.3, or Gingerbread, has NFC capabilities built in, and at least two Android NFC apps are available in the Google (Nasdaq: GOOG) Android Market. Meanwhile, Nokia (NYSE: NOK) has announced that it'll build NFC capabilities into all its new phones from this year.
The Wireless Buzz Around Apple
The latest spate of rumors kicked off with a Bloomberg report quoting Richard Doherty, cofounder of market research firm The Envisioneering Group, as saying that Apple will likely introduce NFC capabilities in its iPad 2 and the iPhone 5.
It's been rumored since 2009 that Apple has been working to add radio frequency identification (RFID) to the iPhone. In August, Apple hired NFC expert Benjamin Vigier, who reportedly conceived and managed both the PayPal Mobile service and Starbucks (Nasdaq: SBUX)' barcode-based mobile payments service.
That same month, TechCrunch reported that Apple was testing NFC-enabled iPhone prototypes using hardware from NXP Semiconductor, the market leader in NFC.
Earlier in 2010, Apple published several NFC-related patent applications, including one for an NFC-based mobile payments service; patents for iPay, iBuy and iCoupons, which are based on the iPhone; and an NFC-based concert, entertainment and sports venue ticketing application.
Apple did not respond to requests for comment by press time.
Wireless Trials With Visa
In the summer of 2010, Visa launched wireless payment trials using the iPhone and other smartphones with four banks -- JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), US Bankcorp and Bank of America (NYSE: BAC) -- Jason Michael, of Visa's public relations agency Fleishman-Hillard, told MacNewsWorld.
That trial used technology from DeviceFidelity, which created cases for the iPhone 3G, 3GS and iPhone 4 incorporating a microSD card using Visa's In2Pay technology.
DeviceFidelity did not respond to requests for comment by press time.
Visa announced in December that it had certified DeviceFidelity's In2Pay microSD solution for commercial use.
In September, Visa rolled out a pilot program in New York that let commuters pay subway, bus and train fares wirelessly with their iPhones. New York City Transit, NJ Transit and the Port Authority of New York and New Jersey are participating in the program.
Money Talks
There's money to be made in mobile payments, which is why Apple, Google and Nokia are galloping into that area.
"PayPal has seen a 30-fold increase in mobile payments in the last two years, from $25 million in 2008 to $750 million in 2010," Nadav Naaman, head of PayPal Mobile Applications, told MacNewsWorld. "Consumers are embracing mobile commerce and the mobile wallet more readily now."
Indeed they are, and Apple seems to be lagging behind in the race for the mobile payment dollar.
Google has already announced that Gingerbread, or Android 2.3, will have NFC capabilities built in, and has included an Android NFC package on the Android Developers' blog.
Further, two NFC apps are already available in Google's Android Market. One's Taglet, and the other's Enable Table NFC.
Nokia will build NFC capability into all its devices from this year on.
So, is Apple late to the market?
Not necessarily -- Starbucks has eschewed NFC in its mobile payment system that it has begun rolling out to its stores in the United States because the NFC infrastructure isn't mature enough yet, the company's Chuck Davidson said.
Divided We Stumble
In fact, it's not clear whether the United States will ever have one nationwide wireless payment technology.
Visa's got its own technology; AT&T (NYSE: T), Verizon Wireless and T-Mobile USA launched the ISIS mobile payment network in November, which works with Discover Financial Services; mPayy is proposing the use of RFID chips; and then, of course, there's NFC.
"Despite the hype, NFC still hasn't made it through," Diarmuid Mallon, senior product marketing manager at Sybase (NYSE: SY) 365, told MacNewsWorld.
Enterprises are implementing mobile payment strategies using mobile apps and smartphones, but they're facing an uphill battle.
For one thing, the Android market is fragmented; for another, there's a multiplicity of handsets on the market, Mallon pointed out.
"Today there are more than 1,000 different handsets being used on U.S. networks," Mallon stated. "Even if you look at handsets with more than 100,000 users, there are more than 350 models. To reach all these users will take a multi-channel approach.
