Go Cashless Shopping with your iPhone5 & iPad2
Yes, You heard it right. It is rumored that Apple is working on a new technology which will soon replace our wallet with iPhone. Apple is testing “near field communication(NFC)” chips in their next iPhone5 & iPad2. NFC chips are what make wireless transactions possible with tap-and-go credit cards, and some cell phone manufacturers are preparing to bring the Asian success of the smart phone wallet stateside.Apple’s doing more than just playing around with the technology–they’ve got big plans for NFC chips in the iPhone5 & iPad2.
What is NFC?
Near-field communications, or NFC, is one of the more promising up-and-coming technologies in the mobile world. In the near future, we’ll be able to make secure mobile payments or send files over a short distance with our phones–but nobody has taken that first big step to make NFC a common reality.
NFC is a short-range wireless communications tech, not too different from other short-range protocols like RFID (radio) and Bluetooth. NFC works a bit differently–it uses inductive magnetic plates to exchange information, which makes it easy and cheap to deploy, as well as secure enough to handle mobile payments. You can embed the little magnetic tags in just about anything, providing links, videos, photos, payments, or all kinds of other fun stuff.
The iPad 2 talk is conceivably more straightforward. Typically, NFC is associated with mobile payments, but don’t forget that it can also be used for a host of other short-distance data communications. In fact, it could well be that NFC becomes a staple of most Apple products for beaming information instantaneously and securely over a short distance. Things like photos, movies, etc. Also, imagine if the iPad is in your bag or purse, it could certainly still be useful when it comes to paying for things by sending a signal to a receiver a few inches away.
The obvious main reason that NFC hasn’t taken off yet for payments is the lack of hardware support. But one reason that’s been slow to come is that manufacturers likely know that there’s simply no good payment processing system behind any of the current ideas. In fact, the best possible way for things to start moving is probably for the credit card companies to do this themselves and get the ball rolling. But while they are testing the technology, they don’t seem to see the need to disrupt a system that is already working.
But what about the other side of the coin? It’s fine if Apple builds NFC into their devices, but there still needs to be equipment to read them. There’s a bit on this as well:
Apple has created a prototype of a payment terminal that small businesses, such as hairdressers and mom-and-pop stores, could use to scan NFC-enabled iPhones and iPads. The company is considering heavily subsidizing the terminal, or even giving it away to retailers, to encourage fast, nationwide adoption of NFC technology and rev up sales of NFC-enabled iPhones and iPads.
As per TechBook Apple is working on a mobile payment terminal prototype that could be used in small stores–bodegas, mom-and-pop stores, that kind of thing–and might consider either subsidizing it or flat-out giving it away to these retailers. That’s one of the better ways of getting this kind of tech out there, though it would be expensive at first.
How will it affects small businesses?
For starters, entrepreneurs could adopt it as a convenient way to make payments. Even small slivers of time savings are a good thing for busy business users. On the other hand, Apple could subsidize payment terminals for small businesses that would allow them to accept payments from iPhone and iPads. That could be a hot business accessory on par with having a standard POS system sitting on the counter. There is even the potential for lower fees than businesses currently pay out to the big credit card processing networks.
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