The business and culture of our digital lives,
from the L.A. Times

Category: Near field communication

Apple iPhone 5, iPad 2 could have wave-and-pay features


The next Apple iPhone might include features that could enable users not just to make phone calls but also to make purchases with their phones.

Buying a pair of jeans with an iPhone, a cup of coffee with an iPad or maybe movie tickets on a Droid could be an option in the near future.

And all it may require is pulling out a smart phone, or tablet, and waving it above a receiver or scanner -- as opposed to sliding a debit or credit card, or trading good ol' cash and coin.

Multiple reports have come out today citing various sources on Apple Inc.'s supposed plans to include "near-field communication" features in the iPhone 5, which is expected to hit stores this summer.

Apple, for its part, is declining to comment.

Speaking to Bloomberg, analyst Richard Doherty of Envisioneering Group said the next iPhone and future iPads could be used to make purchases by transmitting financial information to receivers in stores over a distance of as much as 4 inches. Doherty cited Apple engineers working on such hardware for his information.

The iOS-device features could access a user's iTunes gift card info or credit-card and bank data, Bloomberg reported.

If Apple were to add such abilities to its mobile products, it could not only help the Cupertino company tap into a $6.2-trillion pool of money that U.S. consumers spend each year but could also enable the company to cut out credit-card processing fees on every purchase currently made through iTunes, the report said.

The Financial Times ran a similar report today about pay-by-phone features coming to the iPhone, citing "Asian suppliers and others who have been in talks with Apple."

The report also noted that BlackBerry maker Research in Motion, as well as smart-phone and tablet competitors that use Google's Android operating system, are also adding near-field features into upcoming devices.


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AT&T, T-Mobile and Verizon partner on Isis mobile payment project

AT&T, T-Mobile and Verizon Wireless want to replace your wallet with a smartphone. 

The companies, three of the country’s largest mobile carriers, are partnering to create a national “mobile commerce network” to allow customers across the country to make purchases with just a wave of an iPhone or Android.

The Isis project, announced Tuesday, will be headed up by Michael Abbot, a former financial executive with GE Capital.

The Isis setup would tap smartphone and near-field communication technology, which passes encrypted information between devices at close range but doesn't require contact.

That differs from technology from VeriFone or Square, which use accessories that can read a physical credit card. The companies behind Isis said they are developing security and privacy safeguards.

“While mobile payments will be at the core of our offering, it is only the start,” Abbot said in a statement. “We plan to create a mobile wallet that ultimately eliminates the need for consumers to carry cash, credit and debit cards, reward cards, coupons, tickets and transit passes.”Credit card

Over the next year and half, the venture will be rolled out in “key geographic markets,” the companies said, eventually becoming available to all merchants, banks and wireless service providers.

Isis will be hooked up with Discover Financial Services’ payment network -- currently offered by more than 7 million U.S. merchants. Barclaycard US is expected to be the first issuer.

The mobile payment system is already popular in countries such as Japan. Card issuers such as Visa and Mastercard have also been testing options that would likely compete with Isis.


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Google's Eric Schmidt shows off mystery Android phone, talks mobile payments

Google envisions that Android phones will one day replace credit cards, its chief executive said Monday as he showed off a prototype of a mobile phone running a new version of Android.

This new version of Google's mobile operating system, which has the code name "gingerbread," will be out in a few weeks, CEO Eric Schmidt said at the Web 2.0 Summit in San Francisco. It will include near-field communication technology that could one day turn your smart phone into a digital payment system, he said: Basically, the phone contains a chip that lets you tap it to prompt real-world interactions, which in the future could include paying for something.

"People don't understand how much more powerful these devices are going to be," Schmidt said. But he cautioned not to expect that particular technology to roll out quickly.

"I expect to be carrying my credit cards around for quite some time," he said.

Schmidt demonstrated the technology while on stage. He bumped the phone to wake it up so it could pinpoint his location and provide information about the hotel where he was speaking. The camouflaged phone was "an unannounced device that I carry around with me," he said.

Tech observers are speculating that the mystery phone is the next Nexus -- the successor to the Nexus One, Google's Android phone -- called the Nexus S by Samsung. Schmidt would not give any details about the phone, but hinted that a Nexus One successor could be in the works. When asked about previous comments downplaying the possibility of a second Nexus, Schmidt said: "I said there would never be a Nexus Two."

The near-field communication chips transmit signals over short distances. That gives smart phones the ability to be used in place of credit cards, for example, by broadcasting data to devices that speak the same language. For example, in a store, you could "bump" your phone on an NFC sensor and pay for your purchase without having to open up your wallet.

A number of companies, including EBay's PayPal and Jack Dorsey's Square, are developing technologies that let people tap or swipe their phones to make purchases. Google has been hinting at its growing interest in commerce. The Internet search giant is said to be about to roll out online women’s fashion boutiques.

Schmidt said that mobile payments are promising because the technology reduces the risk of fraud. "The credit card industry thinks the loss rate is going to be much better," he said.

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