Rumor: Apple’s iPhone 6 Will Include NFC Technology

Source: Thinkstock

According to “a source close to the matter” cited by BrightWire via MacRumors, Apple’s (NASDAQ:AAPL) so-called iPhone 6 will include a payment function based on Near Field Communication (NFC) technology. The source also said that Apple has reached a deal with China UnionPay that will allow users to make mobile payments with their iPhones on the more than 3 million “QuickPass” point-of-sale machines in the bankcard association’s network.

As noted on China Union Pay’s website, the company is “the central and pivotal part of China’s bankcard industry” and is the only “bankcard association established under the approval of the State Council and the People’s Bank of China.” China UnionPay’s network includes around 400 domestic and overseas associate members.

According to BrightWire’s source, iPhone users will be able to use the mobile payments service by downloading a China UnionPay app to Apple’s Passbook. The source noted that China UnionPay is currently creating a system that will align with its People’s Bank of China QuickPass standard, but also be compatible with Apple’s iOS. Separately, the bankcard association is partnering with Apple to develop another mobile payment solution to be implemented in the Cupertino, California-based company’s own retail stores.

Rumors about a new Apple payments service were bolstered earlier this year, when The Wall Street Journal reported that Apple executives were meeting with various industry leaders to discuss the implementation of an expanded mobile payments service. Although Apple already allows users to pay for multimedia items and apps through its iTunes Store, the new mobile payments service would likely encompass purchases of physical items and services from a number of retailers and businesses.

Last month, in a research note issued by well-connected KGI Securities analyst Ming-Chi Kuo and obtained by 9to5Mac, Kuo predicted that the iPhone 6 would include an “NFC chip with security element and metal casing.” Although many Android-based smartphone makers currently include NFC technology in their devices, Apple previously appeared to be favoring the use of the Bluetooth LE wireless protocol in lieu of NFC. While Apple will continue to use Bluetooth LE for indoor navigation and location-based advertising through its iBeacons, it now appears that it is moving toward the widely used NFC technology for its mobile payments system.

It should be noted that BrightWire’s report also aligns with recent reports that Apple plans to replace the Apple Store’s current mobile point-of-sale system that uses the iPod touch with a new system that uses the iPhone 5S. According to Forbes, the upgraded system includes a new “shell” made by electronic payment transaction technology provider VeriFone (NYSE:PAY). The shell, which attaches to the back of the iPhone, includes an area where an NFC receiver could be installed.

Finally, Apple also filed a patent for an NFC-based retail shopping system earlier this year. In the patent, Apple described a secure mobile payments system that would utilize several different types of wireless protocols, including NFC. Although it remains to be seen if the latest mobile payments service rumor proves to be true, Apple is already well positioned to create such a service due to its almost 800 million iTunes accounts, the majority of which are linked to credit cards.

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