What the iPhone 5 Won't Be: Your Wave-to-Pay Mobile Wallet

Apple (AAPL) unveiled its iPhone 5 on Wednesday and it features a number of high-quality, enticing upgrades. In particular, the smartphone now comes with a larger display, a higher-quality front-facing camera, a new internal processor, the ability to connect to a much faster network than the current 3G-capable phones, and longer battery life, the company said.

However, in releasing the new phone, the ability to make purchases using a built-in mobile wallet feature, which many experts anticipated, was not included.

This technology, known as near-field communications, is crucial to mobile wallet transactions because, when used in conjunction with an app, it allows consumers to load their credit card information onto their smartphones and then wave that device over a point of sale terminal to complete a purchase instead of reaching into their wallets to dig out a traditional credit card.

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The decision to leave NFC out of the iPhone 5 took some experts by surprise because there are already several Android-based smartphones that come with NFC on the market, and the number will only grow in the future. This might allow Android to gain a significant head start and foothold in the marketplace before Apple even enters. However, others have noted that Apple's modus operandi in many areas of technology is to wait on the sidelines until a specific trend becomes popular, and then work to revolutionize it in some way as it enters the market.

Further, Apple might already be laying the groundwork for such a move. The latest version of its iOS mobile operating system, to be released later this month, comes with an app called Passbook, which many experts have already theorized will support NFC purchases at some point. Currently, it is only designed to allow users to load things like event tickets, boarding passes, store loyalty rewards programs, and so forth onto the phone. But experts have noted that in the near future, the company may be able to broaden its capabilities to support NFC.

NFC is believed to be the wave of the future in the credit card industry, as it could prove more secure and convenient than traditional card use. Many project that the mobile payments industry could be worth tens of billions annually in the next few years.


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