Smartphones: the new wallet – mobile commerce’s big push

We found this great infographic from G+ and wanted to share it on our blog as it illustrates the state of mobile commerce pretty well.  The infographic shows the continued pattern of growth with m-commerce and the major impact from NFC.

Imagine how convenient it’ll be to make payments at restaurants or stores with your iPhone or iPad! Imagine how great it’ll be to have a fast checkout process and not have to wait in line. According to Bloomberg’s report, Apple’s next iPhone and iPad are expected to have NFC technology.

NFC technology (near field communication) that is gaining popularity, allows various forms of data transfer between the iPhone and other NFC capable devices. NFC technology receives and sends out information at distances up to 4 inches. This means iPhone and iPad users will soon be able to make payments using NFC.

The key to this is iTunes, or better say the payment system within iTunes that is already in use by millions and millions of people around the world. By entering the payment service market, Apple has a massive opportunity. By including NFC into its iPhone and iPad, Apple could use its existing iTunes accounts and give consumers an alternative to traditional financial services by Visa, MasterCard and PayPal.

Right now, Apple has launched a prototype for the payment services by allowing smaller businesses to scan NFC-enabled devices.  Upcoming versions of the AT&T iPhone and iPad 2 are expected to have the technology enabled and the technology is anticipated to be available by mid 2011.

If Apple can nail NFC and tie it directly into their iTunes payment system, it could change everything. This can be an evolution of the payment system within iTunes.

This could be the greatest tactic they’ve ever pulled. Is it possible that Apple and iTunes will replace Visa and Mastercard? From our perspective, it seems unlikely that they will go that far due to the complications and the financial burden associated with giving consumers credit.  But I guess we will never know how far they will go and we will just have to wait and see!

The most interesting article that I came across this week was about cell phone payments and an interview with RIM CEO Mike Lazaridis.

I have been particularly interested in payment processing with mobile devices for some time now and specifically noticed that its really starting to take off in other places of the world such as Asia.  I always imagined that if payment processing were to take place, it would really need to be driven through the carriers.  I guess Mike Lazaridis also sees it that way.

In his interview with Laptop, there were discussions about PayPal and the ability for apps to be paid for through Paypal.  Unlike Apples iTunes model, this means that Blackberry users have one extra step and that is to sign up with PayPal.  Obviously Lazaridis recognizes this barrier and has mentioned that they are working with carrier partners to get the payment processes to be handled on their end.  If this does in fact happen, the mobile space in North America would forever be changed.

The only reservation I have is where the carriers would draw the line on payments.  Would they allow for payments only from applications or would they allow payments to be processed through retailers and be billed to a cell phone bill at the end of the month.  And if they did in fact allow for billing by retailers would they ultimately become a credit agency?  Would they allow some of their users to make purchases and they would prohibit others?  Will they begin to replace VISA, MasterCard and AMEX?

I can’t say for certain what role they will play but I am sure that they will take a larger role in our daily payment process. This is only a little while away and it will be interesting to see how it all unfolds.