iPhone 5 & iPad 2 As A Payment Device?

“How would you like to pay? Cash or credit?”, asks the sales assistant in your local coffee shop. You smirk, take out your phone and reply “iPhone, please”.

Bloomberg is reporting that Apple is planning to introduce NFC (or Near-Field Communication to you and I) in the iPhone 5 and iPad 2. NFC is a short-range wireless communication technology which enables the exchange of data between devices.

An example of a device that NFC is capable of communicating with is cash registers.

If Apple were to introduce NFC in their mobile devices it would bring them into competition with the likes of VISA & Mastercard as a credit payment provider. According to the report, Americans spend $6.2 trillion, yes trillion, each year on goods and services.

Because of the iPhone’s popularity, it could become the perfect credit card killer.

Richard Doherty, directory of consultancy firm Envisioneering stated in the Bloomberg post:

Apple is considering starting a mobile payment service as early as mid-2011. It would revamp iTunes, a service that lets consumers buy digital movies and music, so it would hold not only users’ credit-card account information but also loyalty credits and points.

Using the service, customers could walk into a store or restaurant and make payments straight from an iPad or iPhone. They could also receive loyalty rewards and credits for purchases, such as when referring a friend.

This isn’t the first time the iPhone has been considered as a payment device. Square allows you to use your iPhone to accept payments and charge while on the move.