Apple NFC Mobile Payment Patent

Bloomberg reignited speculation that the Apple iPhone 5 will have NFC mobile payment capabilities. TechCruch picked up the story and fanned the flames.

There’s nothing new here however.

Bloomberg’s article “Apple Plans That Lets Users Pay With iPhones” quotes two consultants Richard Doherty and Richard Crone and does not specify whether either has direct knowledge of the matter. Apple declined to comment and is notoriously secretive. If either consultant has knowledge of Apple’s NFC plans, they are quite likely in breach of their confidentiality agreement.

TechCruch picked up the story with the article “Apple Aims To Take NFC Mainstream; Perhaps The Greatest Trick They’ve Ever Pulled?“. TechCrunch reads into the Bloomberg speculation and questions whether the Verizon iPhone will ship with NFC.

Here’s the bottom line, and this my speculation based upon my industry experience:

Apple is very likely to include NFC in iPhone 5 Apple is also well positioned to offer a mobile payment service using iTunes iTunes has over 160 million payment instruments on file (Bloomberg missed the number by about 60 million) Apple is likely to take a cut of every payment made through their service. My guess is 30% of the transaction fee which typically ranges between 1% to 3% of the transaction. This new HUGE revenue stream is not baked into Apple’s stock valuation.

Also, for the rest of us, this is all about the iPhone. There are lots of different phones out there and the competition about to explode. We will see tremendous innovation and that means lots of competing ways to do this.

The chips are just one piece. Expect a sea of “mobile wallets” from all kinds of providers. Also expect a deluge of applications that leverage NFC to do interesting things not related to payments (super local advertising, device configuration, automated check-in, etc.).

There’s potentially a mountain of interoperabilty issues for us to deal with. Each phone and each wallet may operate differently from an application compatibility perspective.

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