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How Apple Iphone 5 and NFC will replace your wallet

Updated on November 30, 2011

So i dont need to bring my wallet when going to the store? I only need to bring the phone?

For decades we have been promised technology that will free us from money, identity documents and other papers. Everything would be replaced by a clever device in the future. As we know, this has not happened. On the contrary, you probably have pockets filled with special cards and coupons from different chains. But now the future is finally here!

The technology that will empty our pockets is called Near Field Communication, NFC. As the name suggests, this solution is used to communicate with nearby devices. This is also done in a quick and easy way.

The solution is somewhat reminiscent of bluetooth, but nfc is different on several points. Most importantly, the connection element. You create a connection and start data transfer at lightning speed and without any configuration. The technology is suitable for distances of about four inches - making it difficult for potential thieves to intercept the signal.

The future of transactions?
The future of transactions?

All in one place

This may not sound exciting, but the possibilities are huge. For example, establishing a connection between your phone and checkout at the supermarket, Just by waving your iPhone to create contact. Then you just agree to the transaction as you do with regular credit cards.

But that does not stop there. In contrast to the usual credit card, you can see your current status on the phone. Furthermore, you can also store discount coupons, levels of different types of bonuses and a complete history of receipts. All in one simple and powerfull unit.

Problems with NFC

But there are problems too. One of the biggest is - not surprisingly - safety. Virtually all wireless protocols have been subject to successful attacks over the years. A technology that sends money through the air will be a fair game. Disruption, data manipulation and eavesdropping are three major risks.

Of course, this is a problem that all stakeholders are fully aware of. Data Transport is protected by encryption, and this will be enhanced even more when the time comes to replace cash with them.

If Apple is investing in the NFC technique in the iPhone 5 and integrate the solution with the iTunes Store, millions of users will have access to the technology this year.

Apple might change the way we handle money
Apple might change the way we handle money

Great interest by the companies

So this is an exciting new technology? No, not really. As early as 2003, Some standardization agencies have put their stamps on the first specification. But since then there has not been any big companies that have put their weight behind the technology. Until now..

Phone Labels - with Google in the front are now starting to implement the NFC technology. Latest version of their own Samsung phone; Nexus S, incorporates circuits for NFC, and other Android phone is about to follow suit. But yet Google has not tied any services to the technology.

Even operators are starting to get interested. In Sweden, TeliaSonera has been active and acted in several pilot projects. They include tested ticketing with a bus company and digital room keys with the Clarion Hotel in Stockholm.

There are also stakeholders in the financial world that still want to have control over money flows. Therefore, both VISA and Mastercard invested heaps of money in various NFC projects. In fact, Visa already have a solution for IPhone just waiting for the technology to be implemented.

Would you like to pay with your smartphone when you are in a store?

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How Apple might change the way we handle money

If the next version of the iPhone includes an NFC chip, millions of users will be able to use the system immediately. That will encourage businesses to invest in NFC in its stores. And if Apple starts to use the technology the others will soon follow.

There is no concrete evidence that Apple will really go for it here, as usual, they have not confirmed anything.

But there is a huge chance of NFC to be implemented already with IPhone 5. They have, for example, recently filed several patents in which a digital wallet figures. Several brands are also protected, iPay and iCoupons for example. They also hired one of the really big names in NFC, Benjamin Vigier.

Samsung is one of many companies that manufacture NFC chips. Therefore, it is no wonder that they already have phones with the technology.


Will Apple IPhone 5 contain the technology?

If the next version of the iPhone comes with an NFC chip, Apple - as opposed to Google - will most likely immediately support the new feature with exciting services.

If this is then is enough to make Apple a major player in the NFC market remains to be seen. The rule has been that the phone manufacturers, operators and financial institutions collaborated on this type of solution, but Steve Jobs has previously shown that it is possible to work around such obstacles.

But until Apple release a device with NFC, we can only speculate. The only thing we can feel quite certain of is that if they act, they will do it better than anyone else could.They will probably give the technology the boost needed to reach the critical mass required. And that would - finally - make the usual wallet out of date


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      Derdriu 6 years ago

      lejonkung: Thank you for the clear, concise, logical discussion of such a technological leap of faith. It will be fun to check back and see how your poll goes.

      Voted up, and all categories too,



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