With the launch of the latest iPhone just over a week away the Apple rumour mill is putting out stories with the speed of Foxcon assembly line. The almost constant "reports" that the iPhone 6 will support mobile payments are getting hard to ignore, writes Billy Bambrough
The latest "leak" to escape from Apple HQ is that the three big credit card companies – MasterCard, Visa and American Express – have signed deals with Apple to support the new phone’s contactless payments plan.
Go deeper with GlobalData
This rumour has come separately from Bloomberg and Re-code, although at the rate that people are speculating, some people are bound to make the same guesses sometimes.
Let’s take a step back from the relentless rumours for a minute and weigh up Apple’s options and what they will mean for the industry.
- Option 1) Apple incorporates NFC
This is certainly the rumour that is most persistent, but seems the most unlikely. NFC has been around for a long time and here is no reason to believe that Apple will incorporate NFC into their devices this time around when they’ve not done before. Nothing has really changed in the world of NFC from this year to last, except the further development of HCE (which admittedly Apple would be in favour of to remove the telcos from the equation).
If NFC in the iPhone happens then Apple will for the first time be admitting that the industry standard is as good as it gets. This would not be very "Apple" of them and I think we’re more likely to see Apple come out with its own thing.
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By GlobalDataYou can be sure though, if Apple jumps, the world will become NFC-enabled so quickly, you won’t be able to move for NFC readers. As it is, it’s no surprise that many retailers have held off incorporating NFC when 50% of their customers use phones that cannot support it.
If Apple do go the NFC route, expect to see even more retailer and third party mobile wallets hitting the App Store and Google Play. Investment in mobile payment tech systems will get a big boost from Apple going NFC too.
While an NFC-enabled iPhone won’t kill beacons it will delay their use. Customers can only deal with one new thing at a time and to expect a store to roll out both NFC readers, beacons and QR codes all at once will be overwhelming.
Likelihood of NFC: 4/10
- Option 2) Apple raises its bet on beacons
Apple has already made it clear that it likes beacon tech. You can buy an iBeacon and the iPhone 5 uses BLE 4.0. In my own opinion BLE trumps NFC on almost every level, allowing phones to interact and make payments from further distance.
While the technology is still quite rarely seen, beacons could very easily spring up all over very quickly. Apple is retailing its iBeacon device for as little as $1 and as the entire device can be managed through a smart phone or tablet there are almost zero barriers to adoption anywhere in the world.
The mobile payments industry that has been built up over the last few years, betting that Apple will move towards NFC eventually could be knocked back to square one if Apple come out all in favour of beacons and totally reject NFC. Many fledgling companies would be seeking lots of funding to change their strategy to keep up.
If Apple did opt for pushing beacon tech more with the new iPhone it will be the final nail in the coffin for NFC. Years of below-expected adoption in addition to the prime industry mover refusing to adopt would see the communication tool all but disappear from devices within a few years.
Likelihood of a beacon push: 7/10
- Option 3) Apple goes for software before hardware
It is almost a given that Apple is going to opt for some sort of upgrade to its payments software. It’s been sitting on 800m peoples’ card details on iTunes for long enough without making some kind of push towards a more comprehensive payments tool, based around iTunes.
Apple could well be inclined to issue updates for a mobile wallet, easing customers into the idea of storing payment details directly on their iPhone before trying to push them right into the world of mobile based payments.
The changes to the current market if Apple focus solely on software will be slight, although it will be another blow to wide NFC adoption to have another whole year of Apple separation.
Likelihood of Apple upgrading software before hardware: 5/10
- Option 4) Apple does nothing
The old Apple classic, Apple has a habit of waiting until it is absolutely sure it knows what consumers and the industry wants before moving in a particular direction. Although the move towards biometrics with its finger print scanner on the iPhone 5s is not viewed in the same way as many of its upgrades, the company rarely makes a bet that it’s not willing to get behind 100%.
Due to the extreme uncertainty in the consumer payments space at the moment it would not be beyond possibility that Apple decide to remain on the sidelines until the outcome is a little clearer.
Apple doing nothing on the payments front seems quite hard to believe given the huge speculation that has been flooding the market. Everyone in both the payments and tech industry thinks that the time is ripe for Apple to make a ruling that will likely define how we make mobile payments for years to come.
Likelihood of Apple doing nothing: 2/10
