Like We Predicted, Apple Avoids NFC in iPhone 5
The iPhone 5 bills itself as faster, lighter, sleeker and smarter than its predecessors, but is it more conducive to mobile payments? After Apple’s much-hyped and underwhelming unveiling of the newest Apple smartphone, we’re still not quite sure of the answer to that question.
It’s true the iPhone 5 doesn’t come with NFC capabilities. This won’t surprise regular PYMNTS.com readers, as our own Karen Webster wrote two weeks ago not to expect any such technology on the latest iPhone iteration. That didn’t stop the rumors from swirling, though, and even hours before Apple’s event, stories suggesting that the iPhone 5 would be NFC-equipped poured out from all corners of the Internet.
Now that we definitely know that’s not the case, what does the iPhone 5 have to offer the mobile payments world?
Apple announced that its new Passbook (which they debuted in June) will come preinstalled on every iPhone, and the app’s apparent aim is to serve as a precursor to an Apple mobile wallet.
You won’t be able to store credit or debit card information on Passbook, and it lacks standard mobile banking functionality, but it does allow you to store coupons, tickets and loyalty cards all in one place — complete with a system that updates you as to when offers expire and lets you check the balance left on said cards. Partners announced for Passbook included Delta, American Airlines, Starwood Hotels, Sheraton Hotels, and Ticketmaster.
It’s not hard to see how such a system could be used as a jumping off point for a mobile wallet in the future – especially if Apple does decide to incorporate NFC in its next rollout. In addition, Passbook’s storage capabilities could directly compete with some of the loyalty features in Square’s Pay with Square location-based payment app.
Another advantage of the iPhone 5? Its price point. Starting at $199, analysts foresee immense ripple impacts of the device that just may shape how credit unions interact digitally with their mobile customers, the Credit Union Times reported. They predicted that more than 10 million iPhone 5s will sell in Q4 in the U.S. alone, which would put a lot of used, older iPhones on the market, cheap, and Apple is also slashing prices on old iPhones ($99 for the one year-old 4S; the two year old 4 will be free, with a two year contract). What this means is that more consumers will own smartphones and want apps for their banking.
Apple also announced that there are now 435M iTunes accounts — up from 400M in June. iTunes is a pretty widely used digital wallet and that’s a large consumer base for Apple to leverage. Denée Carrington, a senior analyst at Forrester, told Ad Age, "It seems like a natural evolution for Passbook to sync with iTunes payment credentials at some point in the near future."
So what do you think of Apple’s much-anticipated smartphone? Does iPhone 5 meet your expectations? Will you be making a purchase when it's released on September 21? Tell us in the comments section below.
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