Why Apple’s iWallet Won’t Have Anything To Do With NFC

Why Apple’s iWallet Won’t Have Anything To Do With NFC

Apple's iWallet is already in your pocket.

Ask what the next revolutionary feature for the iPhone will be, and NFC is a common answer. NFC — or near-field communications — is an ultra low-power chip that allows two devices to communicate small strings of information within a couple feet of each other.

Why’s it so revolutionary? The most commonly cited “magic” that NFC would bring to the iPhone would be the ability to use your device to pay for goods and services, just like a credit card.

In other words, instead of pulling out your wallet to buy groceries, get onto the subway or pick up a MacBook at the local Apple Store, you’d just tap your iPhone against a point-of-sale terminal near the register instead. The NFC chips in both would communicate and you’d be on your way, no signature or PIN code required.

Pretty neat, huh? NFC would theoretically allow Apple to take a cut of real world sales made of even non-Apple products. They’d become a mobile payment company. That seems like such a no-brainer that everyone from Bloomberg to The New York Times.

The only problem? Never going to happen, because Apple has already deployed its mobile payment solution, and it’s hidden inside every iPhone 4S that has already been sold.

That, at least, is the really quite excellent argument of Research Farm’s Pablo Saez Gil, who says Apple will eschew adopting NFC because it’s embraced Bluetooth 4.0 and it’s excellent Bluetooth Low-Energy capabilities. Apple has already sold millions of iPhone 4Ses that come with Bluetooth 4.0, and Gil argues that it’s a much better fit for mobile payments for Apple than NFC.

[Bluetooth Low Energy] allows low-consumption chips to act passively in the form of stickers in a similar fashion to NFC tags and devices can automatically and passively connect and transfer information seamlessly. The technology also enables long distance connections between devices of up to 50m. This feature will eventually enable payments on the go, without the need of fixed POS and traditional checkouts.

Why’s Bluetooth Low Energy a better fit for Apple than NFC?

Look at how payment works at your local Apple Store. You walk in, flag down a Genius, you tell him what you want, he swipes your card on his iPhone and you walk right out the door. You don’t wait in line at a register. There’s no till. It’s all done wherever. That’s how Apple believes retail shopping should be done.

With NFC, though, it’s all still about the register, the “tap-and-go” till. Worse, those NFC terminals are all controlled by the credit card companies and payment processors, not Apple.

As Gil notes, that’s a huge lost sales opportunity that could be addressed with using Bluetooth Low Energy, because it would increase global demand from retailers looking to replace their registers with Bluetooth 4.0 equipped Macs, iPads, iPod Touches and iPhones.

The genius of this plan? It’s already deployed. There’s no need to find room in every iPhone for an extra chip, or wait for other companies to get their act together about NFC and actually get it into stores. Because Apple has been deploying Bluetooth 4.0 equipped devices since mid-2011, all Apple really needs to do to suddenly become a mobile payment company is go on stage at WWDC next month, officially announced iOS 6 and then say:”BAM! iWallet! It’s here… and your iPhone 4S is already capable of it!”

Makes sense to us. Look at what Google’s going through with Google Wallet, a thoroughly stalled NFC initiative for Android. People have been talking about NFC for years, and yet it’s still not even close to taking off. If Apple’s really going to enter mobile payments, doesn’t using a technology that embraces Apple’s own retail philosophy, helps sell more Macs and uses technology you already have in your pocket make a lot more sense?

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  • RilesPro

    hmm, sounds good to me

  • kobe_3002

    How can I use this as a payment method? Would love to try it out at capable stores!

  • Mikail Graham

    kobe_3002, if you have an iPhone and have the Apple Store app installed on it, then just go into an Apple Store and buy anything that has a BAR CODE on it you can scan, works like a charm and is currently the only place you can try out this system. Quite smooth transaction to be honest, I just wonder how those Apple Store folks know you actually paid for something as I asked one of them and they “we trust you, and if you didn’t really scan & pay for it then we hope you feel very guilty about it” – whoa! That is some trust situation eh? One has to wonder…

  • deank

    very smart, makes perfect sense.

  • spimey

    A solution allowing users to walk into an area and wirelessly buy things will not scale, or be a ubiquous solution that allows all objects to be included.  Will users want to walk into a store and have hundreds of products all vying to be the one product that is selected for purchase, or will the users want to control what and how they are solicited?  I’m thinking the latter.

    Besides, buying stuff is just one of hundreds of usecases for the “tap” interface.  I’m not saying the “tap” interface needs to be implemented with NFC, as it sounds like Bluetooth 4.0 could enable the same mechanism. But we should not frame the argument that “tap-and-go” is a pure NFC thing, and Bluetooth is something different.

  • bondman008

    Excellent article! Some very good points, what I still miss though is: How secure is this going to be for the user? Is there a possibility to hack into the Bluetooth 4.0 wireless network by another device in 50 meters range and authorize a false payment?

About the author

John BrownleeJohn Brownlee is a Contributing Editor. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his girlfriend and two parakeets. You can follow him here on Twitter.

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