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Mobile Payments for Next New iPhone?

It makes sense for the next new iPhone to support NFC mobile payments.

I know we haven’t even held the fourth generation iPhone in our hot little hands yet, but I was thinking about what Apple should put in the next new iPhone, and it seemed obvious that adding NFC to enable mobile payments for real world purchases made perfect sense.  Then, when I saw today’s announcement regarding the acquisition of Innovision by Broadcom, that solidified my belief that this must be coming down the pike.

Mobile payments are a wonderful idea — pay for modestly priced items in the real world by just putting your phone up to a reader.  It’s gotten some traction in Japan, but it’s failed to see widespread adoption, because it is so darn hard to get the multiple players in disparate ecosystems to act in concert.  You need:

(1) The handset vendors to put the NFC chips, and supporting software, into a critical mass of phones.

(2) The mobile operators, who generally subsidize the phones, to enable the payment mechanism (or, in an unsubsidized ecosystem, you need a banking partner to enable the payment mechanism).

(3) A critical mass of merchants to install point of sale systems to use the same NFC system as the phones have.

(4) A critical mass of users to actually use the system to pay for things.  Making the use of mobile payments be “easier than cash” is a necessary, but not sufficient condition.

Getting all four of those to move in concert has proven to be an insurmountable barrier to date.  BUT, Apple is in the perfect position to pull it off!  Let’s take the each of the items above in turn.  Apple doesn’t have to convince anyone other than themselves that they should put the NFC chips, and supporting software, into the phones.  Apple already has iTunes as a payment mechanism for the majority of iPhone users.  If anyone can leverage their brand to convince merchants to do something, it has to be Apple.  And, with the rabid Apple enthusiast fan base, they will get a lot of early adopter end users to give the system a try.

Apple is likely the only company on the planet (outside of Japan) that has the ability to pull this off.

I can only think of one reason why Apple might choose NOT to do it.  The only way that Apple can recruit a critical mass of merchants to install the NFC point of sale systems is to go (quasi) public with the effort long before the launch, and Apple hates to go public with anything before a launch.  Of course, given the impressive pre-order rate for the fourth generation iPhone — despite the phone getting leaked a couple of months ago — maybe they should rethink that stance (heck, maybe they should be cutting some affiliate marketing checks to Gizmodo for creating so much demand).

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