Apple testing near-field communication for iPhone?

Apple raised some eyebrows over the weekend when news spread it had hired an expert in mobile payments.

Future iPhones could get chips that allow close-proximity transfer of data between them.
(Credit: CNET.com)

But now there's a report that says the company is already testing a prototype iPhone with near-field communication (NFC) chips inside, which could pave the way for using future iPhones as a mobile wallet.

TechCrunch heard from an unnamed source that on Tuesday Apple is testing an iPhone with NFC chips it's ordered from NXP Semiconductor. It's not clear what kind of tests, and it could be very preliminary in nature. But coupled with the hire of Benjamin Vigier from mFoundry as mobile payments product manager, it does seem possible that Apple could be planning to open up its premier product to the world of commerce outside of iTunes.

First, what is NFC? It's a technology that allows data to be sent wirelessly over very short distances, around 4 inches. It sends data from a chip inside a device like a phone, to a payment terminal, or even another device. While mobile payments is an obvious use — this is used in places outside the US for things like paying bus or train fare — it's not the only one. It could also be used to transfer data between devices very near each other, say an iPhone and a laptop.

But using it for payments seems like almost a no-brainer for Apple, which has 150 million credit cards already hooked up to iTunes accounts, as CEO Steve Jobs announced in June to its annual meeting of developers. Plus, this is a burgeoning area of the wireless world. There are applications being built for iOS devices as well as Android and other platforms that enable mobile payment, so why not just build a contactless payments feature right into the iPhone hardware?

Apple tends to ship new iPhones mid-year, so if Apple does end up putting NFC chips in the next version of the phone we'll still have to wait awhile to see what they come up with.

Via CNET.com