Yesterday we reported that dreams of an NFC-enabled iPhone 5 would have to be put on hold. Apple, despite reports of working prototypes, is reluctant to implement the technology because there is not yet a “clear standard across the industry.”
Apple of course is believed to be working on integrating iPhone payments via iTunes and the Register theorizes that whatever solution Apple comes up with will be proprietary in nature.
But enabling mobile payments requires a lot more than just radio: it also needs a back-end processing system and a connection to the banks, and it is here that Apple is likely planning its own solution.
A phone such as the Android-based Nexus S can host multiple payment mechanisms, on the embedded secure element, or the SIM. The latter falls under the control of the operator, the former is managed by Google. Payment systems that wish to be installed on the Nexus S need to ask the permission of Google, or the operator, and both parties have said they will be happy to accommodate multiple systems. Apple has a history of insisting that its own solution is the only one necessary, and so could decide to be exclusive.
That would mean not adopting Orange Cash, or O2 Money, and probably not the US-based consortium ISIS either, but that is no great surprise. Apple will process payments through iTunes, and make agreements with Visa or Mastercard to have Apple payments accepted by the existing NFC terminals. The question, therefore, is not if Apple will launch a proprietary payment system, but if it will allow competing systems to be installed.