Using your iPhone as a credit card? It could happen soon.
With rumors, patents and reports pointing to Apple releasing their long awaited smartwatch alongside a larger iPhone 6 this fall, there is new speculation that Apple will also venture into mobile payments. According to The Information, Apple is currently in talks with Visa and other credit card companies about a mobile payments partnership.
The new service would allow users to pay for physical goods on the web, in apps and in retail stores, turning the iPhone into a credit card. By allowing the iPhone to act as direct line of payment for credit card companies, the move would potentially allow for both retailers and their customers to save money by skipping fees normally paid to third-party payment processors. The Information also reports the company plans to run the system without giving up control to wireless carriers, many of who have been working on their own mobile payment solutions.
As for security, Apple has reportedly told some partners that its system would involve a "so-called secured element in the phones—a piece of hardware where sensitive information such as a phone owner's financial credentials can be stored." It's unknown if this hardware will be similar to the NFC (near-field communication) technology utilized by other mobile payment options such as Google Wallet or if it will be something Apple develops on its own.
Apple currently incorporates a "secure enclave" as part of the A7 processor to safely store fingerprints from the Touch ID sensor used on the iPhone 5s. It is possible the company could do something similar for securely storing financial data. The company is expected to incorporate the Touch ID sensor on future iPhones and iPads.
It has been rumored that the new mobile payments system would utilize Touch ID to authorize payments with Apple's Passbook app acting as a virtual "wallet" to hold the credit cards. The company is also expected to leverage the over 800 million iTunes accounts it currently has, a large number of which are attached to credit cards.
With the buzz around mobile payments, it's no surprise that Apple would be exploring entering the field. Forrester Research estimates that Americans will spend $90 billion through mobile payments by 2017, up from $12.8 billion in 2012.