Apple Plans NFC Payment Services for iPhone and iPad

Imagine making payments at stores, restaurants, and other establishments with your iPhone or iPad.  Imagine the convenience and speed of checkout lines because of this technology.  Well now imagine that it may become a reality.  According to Bloomberg reports, iPhone and iPad users will be able to make payments using NFC technology in the near future.

NFC, short for “near-field communication,” transmits and receives information at distances up to four inches.  This technology can tap into consumer payment already on file, such as credit card information, iTunes gift card balances, and bank data, according to the financial industry adviser, Crone Consulting LLC.  It can be used as an alternative to Visa, Mastercard, and Paypal as well as having the potential to be used for loyalty reward systems and for redeeming credits.

Bloomberg figures indicate that Americans spend at least $6.2 trillion every year on goods and services–a hefty number that Apple could get its hands on.  Apple currently pays processing fees on every credit card purchase made on iTunes.  By encouraging and enabling customers to use cheaper methods, like tapping into their bank accounts directly, Apple cuts their costs and the costs of retailers.  Furthermore, Apple can also use this technology to deliver mobile ads to handsets and consequently charge higher feeds for the ads.  By taking note of where each customer is spending money, personalized ads can be sent and Apple can increase the ad rates that it charges.

At the present time, Apple has launched a prototype for the payment services by allowing smaller businesses to scan NFC-enabled devices.  Upcoming versions of the AT&T iPhone and iPad 2 are expected to have the technology enabled and the technology is anticipated to be available by mid-2011.