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Report: Apple halts plans to add NFC payments to iPhone 5

March 14, 2011 — 9:58am ET | By Jason Ankeny

Apple (NASDAQ:AAPL) will not integrate Near Field Communications-based mobile payment services into the next iteration of its iPhone, citing apprehension over the absence of clearly defined industry standards. The Independent reports Apple has told executives at several U.K. mobile operators that it will not embed NFC technology into the forthcoming iPhone 5: "Apple told the operators it was concerned by the lack of a clear standard across the industry," one source stated.

It is believed that Apple engineers will continue to work on an NFC solution, however--earlier this year, Bloomberg reported that the computing giant's mobile wallet efforts likely will leverage Apple customer information already on file, e.g., credit card account numbers, iTunes gift card balances and bank data.

At present, Apple pays credit card processing fees on all iTunes and App Store purchases--by introducing payment services that directly tap customer bank accounts (a la PayPal), Apple could reduce its own costs and enable its partners to trim their prices of their respective products and services. Apple also faces pressure to keep pace with its rivals: In February, Google (NASDAQ:GOOG) issued Android 2.3.3, adding new proximity-based Near Field Communications capabilities including an NFC reader/writer API. Last month, Research In Motion (NASDAQ:RIMM) co-CEO Jim Balsillie promised the majority of new BlackBerry devices shipping in the coming months will integrate NFC technologies, enabling support for mobile payment solutions and other location-specific services.

Industry onlookers have expected Apple to roll out NFC services since mid-2010, when the company named Benjamin Vigier Product Manager of its mobile commerce unit. Vigier previously served as a product manager for mobile wallet, payment and NFC services at mobile financial solutions provider mFoundry, overseeing m-commerce initiatives for clients including PayPal and Starbucks. Prior to mFoundry, he led m-commerce and NFC efforts at flash memory manufacturer Sandisk and French operator Bouyges Telecom. Moreover, some insiders speculate Apple's move into NFC technologies encompasses more than payment services--buzz indicates Apple is plotting an NFC-enabled remote computing solution allowing users to wave their iPhone at any compatible Mac, loading all their personal applications, data and settings from the smartphone to the desktop. In effect, any Mac would mirror the user's own, with the original settings restored when the individual moves out of range.

In November 2010, Verizon Wireless (NYSE:VZ), AT&T (NYSE:T) and T-Mobile USA announced plans to jointly launch Isis, a nationwide mobile commerce network enabling consumers to make point-of-sale purchases via mobile device. Isis plans to introduce NFC payment services in key geographic markets within the next 18 months, partnering with Discover Financial Services to build the necessary mobile payment structure; Discover Financial Services' payment network is accepted at over 7 million merchant locations nationwide. Isis adds that Barclaycard US is expected to be the first issuer on the network, offering multiple mobile payment products.

For more:
-read this Independent article