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With iPhone 6 Apple Ushers In Wave of Credit Card Innovation

September 08, 2014 by Gary Stockton

Apple iPhone NFC

Tomorrow, September 9, Apple will announce a suite of new products including a rumored new wearable device “iWatch”, and a bigger, more durable iPhone 6. Those two product introductions alone will be a big deal for retailers and Apple, but what has businesses buzzing is speculation of a new mobile payments service that comes pre-installed on the new iPhone. The new iPhone 6 will support Near Field Communications (NFC) for mobile payments. NFC allows two devices to transfer encrypted data at short ranges using radio waves. Short, as in just a few inches. NFC enables users to pay by credit card using their phone by simply tapping a beacon at the checkout stand.

NFC Essential Attributes

  • Short range RFID, typically less than 2 inches, triggered by proximity
  • Invented by Phillips and Sony about 10 years ago
  • Three genres: Card Emulation, Reader Mode, & Peer-to-Peer
  • Tags may be powered or unpowered
  • Any MIME data can embedded on NFC tags
  • Relatively slow speed, not suitable for transferring large amounts of data

Historically, the only major company backing NFC technology in mobile devices has been Google. Now that the iPhone will support it, however, many retailers including Apple, Disney, Walgreens, CVS, Nordstrom and many more are retrofitting point of sale systems so that they can support customer demand.

In terms of application support, many leading point of sale applications for small business such as QuickBooks POS, ShopKeep and AccuPOS have NFC capability. With the infrastructure already there, before long, millions of Android and now iPhone 6 toting consumers will demand making payment in this way, and that's good for business. It's the forward-thinking retailers focused on growth that will provided this capability.

Apple's ability to transform industries is proven. Consider the music industry and how people buy music today compared to 20 years ago. Apple, for years, has resisted supporting NFC. That will change this week,and the impact may be fast and enormous. It will definitely be interesting to see how this progresses and how quickly the industry will adopt these new capabilities.

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