Apple NFC: $6.2 trillion American market

A Bloomberg article covers the likelihood that the next generation of iPhones and iPads will be NFC enabled. With its already establish market position in online commerce via iTunes, Apple could position itself to tap into the $6.2 trillion American credit card transaction ecosystem.

The big challenge for companies like Isis, Google and Apple, beyond consumer adoption, is getting the point of sales hardware in place to be able to even use a NFC enabled handset. Along the lines of the Google places program the article describes Apples effort to tackle the issue.

Richard Doherty, Envisioneering Group

Richard Doherty, Envisioneering Group

“Apple has created a prototype of a payment terminal that small businesses, such as hairdressers and mom-and-pop stores, could use to scan NFC-enabled iPhones and iPads, Richard Doherty, director of consulting firm Envisioneering Group, said. The company is considering heavily subsidizing the terminal, or even giving it away to retailers, to encourage fast, nationwide adoption of NFC technology and rev up sales of NFC-enabled iPhones and iPads, he said.”

The analysis from MG Siegler of Techcrunch doesn’t shy away from making a bold prediction: “If Apple can nail Near-Field Communication (NFC) and tie it directly into their already-established iTunes payment system. It could change everything. It could transform Apple from the biggest technology company in the world, to the biggest company in the world, period. By far.”

Always sure to deliver the geeky goods, Daily Wirelss breaks down NFC: “Near Field Communication enables the exchange of data between devices over about 4 inches (10 centimeters). It combines the interface of a smartcard and a reader into a single device and communicates via magnetic field induction.

Two loop antennas are located within each other’s near field. The phone contains your identity, but the tag is just a magnetic loop. It doesn’t need batteries. It can be embedded in a poster or sticker, and can be stuck to menus or store windows. It’s like RF-ID, with a unique identity number, but doesn’t require a separate reader at the store (like a smartcard) to make a transaction. You just place your phone on the tag and press a button. NFC operates in the unlicensed ISM band at 13.56 MHz.”

But back to the $6.2 trillion in US credit card transactions, Apple’s iTunes store has around 100 million users linked to credit card accounts.  Right now Apple pays credit card companies a transaction fee for each sale.  If Apple not only was able to avoid paying that fee but also offer a better (?) way for consumers and merchants to complete transactions, it could very well become the largest company in the world…world…world!

About Daniel Davenport

Daniel is a digital media executive with internet and broadcast experience. Daniel is currently the executive strategy director at THINK Interactive.

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