It wasn't long ago that there was a general consensus that Apple (AAPL +2.08%) would never adopt NFC, or near-field communications, technology to support mobile payments on iPhones. But boy were the pundits wrong. Now Apple is leading the charge with NFC, and the technology might actually catch on.
Apple Pay. Source: Apple.
From dissing NFC to using it
Following the iPhone 5 unveiling, Apple marketing chief Phil Schiller said NFC technology was exempt from the iPhone because he did not think it solves any problems for users. The technology, which requires holding a mobile device with an embedded NFC chip just a few centimeters from an NFC-enabled checkout system, was considered by many to be too cumbersome to ever catch on. But Apple caved with the iPhone 6, pairing the technology with Touch ID to make authentication faster and more secure. Apple's flagship phones finally utilized NFC technology through its new Apple Pay mobile payment service.
But even with Apple on board, there was still skepticism about whether or not the technology would catch on. While it still isn't 100% certain NFC payments are going to become widely adopted, early momentum with Apple's new payment service and a spike in users for Google's NFC technology that has been around since 2011 suggest that Apple may have given NFC the boost it needed.
How Apple may change an industry
If anyone was going to give NFC technology a chance at succeeding, it was going to be Apple. As of September, Apple reportedly had a whopping 885 million iTunes accounts, a figure that was up 10% since the last time it reported a figure in April. Apple CEO Tim Cook said in April that most of these accounts had credit card information attached. For some interesting perspective, this means Apple likely has more credit cards on file than half of Facebook's entire user base of 1.35 billion monthly active users.
Starting off with a bang, Apple CEO Tim Cook told The Wall Street Journal last month, that just 72 hours after its October 20 launch that the tech giant had over one million credit and debit card activations. Importantly, however, while this was nice start, one million is still small in the grand scheme of things. In fact, it's still small even in relation to Apple's own database of credit cards for iTunes. So we can't say for certain NFC is going to define how the majority of us conduct mobile payments in the future yet.
The most interesting takeaway so far from Apple's start in NFC technology is that it has sparked more interest in NFC in general. Citing "a person with knowledge of the matter," Ars Technica reported this week that Google Wallet, another mobile payment service that utilizes NFC technology, is seeing a significant boost from Apple Pay.
Google Wallet, announced in 2001, uses NFC technology like Apple Pay. Source: Google.
"According to our source, weekly transactions have increased by 50 percent, and in the recent couple of months, new users have nearly doubled compared to the previous month," Ars Technica's Megan Geuss reports.
And here's another point worth thinking about: Apple and Google together heading in the same direction with mobile payments is a force to be reckoned with. Already, the duo is causing a stir. MacRumors noted this week that iOS and Android users have even formed an alliance on Reddit to boycott retailers who recently stopped accepting NFC mobile payments as the retailers aim to aid efforts in the development of a competing mobile payment service based on QR codes, called CurrentC.
Apple's dominating presence in consumer electronics, particularly in smartphones, gives any move the tech giant makes instant credibility. Some analysts are predicting that Apple could sell as many as 235 million iPhones in fiscal 2015 -- the majority of which would likely be the iPhone 6 or 6 Plus with NFC technology. This fact alone can help solidify NFC as the technology of the future for mobile payments.
But considering how early NFC technology is in adoption, there is still, of course, room for other mobile payment technologies to catch on. But given Apple's running start and Google's aid in promoting the technology, the duo just might have decided the future of our wallets for us.
