DMSD Insider: Mastercard/Paypass to be NFC partner with Apple on iPhone 5?

Monday, January 30, 2012

Mastercard/Paypass to be NFC partner with Apple on iPhone 5?

Mastercard/Paypass to be NFC partner with Apple on iPhone 5?:

iPhone NFC by moneto

We had some time to talk to a well-connected developer at Macworld who was building an app that, among other capabilities, includes NFC reading for the purpose of mobile transactions. We were obviously curious why they would do that, noting that third party NFC readers for iPhone weren’t popular, aside from the recently announced Moneto, above. He told us that he had no hardware knowledge but he had spoken to Apple iOS engineers on multiple occasions and they are “heavy into NFC”.

I asked how confident he was. He said,”Enough to bet the app development on”.

This isn’t the first we’ve heard that iPhone 5 would have NFC however. Besides the deluge of ideas Apple has been patenting with NFC, the NYTimes said pre-iPhone 4S that an upcoming iPhone would have NFC. While it didn’t turn out to be the next iPhone, it could be the one coming up.

(Moneto again)

The question now has become, who will Apple partner with for their payment systems? Over the weekend we got some hints…

Ed McLaughlin, who heads up emerging payments at MasterCard had an exchange with Fast Company that went like this:

…when asked to give an estimate for when smartphone payments would become commonplace (in other words, would 2012 be the year of NFC or contactless tech?), McLaughlin demurred–and may have dropped a hint about Apple’s future in the industry.

“The timeline is always as rapid as it makes sense for consumers,” he says. “That’s a combination of having a critical mass of the merchants, which is what you’re seeing right now, and getting devices into the hands of consumers. I don’t know of a handset manufacturer that isn’t in process of making sure their stuff is PayPass ready.”

So that would include Apple then?

“Um, there are…like I say, [I don't know of] any handset maker out there,” McLaughlin says. “Now, when we have discussions with our partners, and they ask us not to disclose them, we don’t.”

Apple, of course, has the magical ability to transform whole industries. No one paid for music digitally before Apple unveiled iTunes; virtually no one listened to MP3 players, or carried smartphones, or played with tablets before Apple entered the markets. (And we have good reason to believe they are angling into wireless payment territory.) I asked whether the contactless payments industry needs Apple to hit critical mass.

“Well, anytime someone with a major base moves forward, it advances what you’re doing. So of course,” McLaughlin says.

It seems pretty clear that he wants so badly to say that Apple is partnering but can’t.

NFC for mobile devices isn’t cut and dry however. As Google would tell you with their Google Wallet platform, the carriers can actually prevent device companies from putting apps on the phone. The well-covered Verizon blockage of Google Wallet on the Galaxy Nexus in favor of Verizon’s own ISIS NFC standard could also block an Apple/Mastercard entry.

Like all things iPhone 5, we’ll likely hear more in the coming weeks and months.