Apple has reportedly reached agreements with American Express, Visa and MasterCard to offer an “iWallet” service that allows consumers to use their iPhone 6 to pay for goods at brick-and-mortar stores.
It’s been rumored for months that Apple was preparing to jump into the still-fledgling mobile payments arena, which has yet to gain a foothold with a security-wary general public.
Apple is expected to announce the launch of its next generation smartphone, iPhone 6, this month. So far, the size of the phone has been the biggest source of speculation. But an iWallet-type service — with the three big card networks on board — could be a key selling point for Apple’s newest iPhone.
Many questions linger at this point, especially how many retailers nationwide will be equipped to handle payments with credit and debit cards over the iPhone 6.
It’s also been rumored that “iWallet” will use near-field communication (NFC) technology in conjunction with the fingerprint security system that launched on last year’s iPhone 5S.
The biggest hurdle facing Apple and others trying to take the lead in mobile payments is not the technology, but consumer confidence. Since late last year, headline-making data security breaches have hit major retailers and consumers are wary of any high-tech device partnering with their credit card provider.
Nonetheless, Apple enjoys a formidable advantage in the mobile payments race — 575 million iTunes accounts (as of last year), most of them tied to iPhone- and iPad-carrying consumers with registered credit cards.