iPhone 5 to Replace Credit Card?

Apple Company works on a phone that will allow payment using a technology that could replace the use of credit card

2011 is going to be another year with updates and new releases from Apple. All and sundry are waiting breathless the final announcement on iPhone 5 and iPad2. Every day we are being bombarded by rumors, gossip, and suspicion around these two hot tech products. It seems that this works like a real marketing strategy for Apple; to create buzz long time before launching, then sell in huge quantities.

The technology that could replace the use of credit card is called Near Field Communication (NFC). iPhone 5 would be the most suitable product to use the NFC on. NFC is a wireless technology, similar to Bluetooth and its basic role is to exchange data with other peripheral components by using the radio frequency. In plain English, once this scientific know-how is applied, you will be able to perform mobile payments, as you do with a credit card.

This could be a great success, especially if Apple manages to solve the security problems that NFC has. A good solution could be to rely on applications that use higher-layer cryptographic protocols (e.g., SSL) to establish a secure channel. Bloomberg announced in the end of January that new generations of iPhone, iPod and iPad products would reportedly be equipped with NFC capability which would enable small-scale monetary transactions. Being the most waited and used product, chances are that iPhone5 will be the first one to bear  the NFC flag.

The license registered by Apple will have an application for payments, a biometric band that will allow the authentication using fingerprints and a chip similar to those that are being used on actual credit cards.

We have enough signs to say that this is going to be a revolutionary improvement, not only for Apple, but for the whole world. More companies, amongst which, Nokia and Sagem, have expressed their will to release mobile phones with NFC technology, most probably, during 2012.

There are companies that have already implemented the NFC technology. The British branch of Orange partnered with a series of retailers to use this service. There are also current trials in other 15 countries in Europe(including France, UK, Germany, Austria, Poland, Norway, Turkey, Romania), Asia&Oceania, Latin America and Middle East.