NFC-less iPhone a blow to industry: PayPal

If Apple does decide to skip near-field communication (NFC) technology in the next incarnation of the iPhone, it would deny NFC the chance to go mainstream, according to PayPal director of mobile, Laura Chambers.

(Credit: Credit card image by Olgierd Rudak, CC BY 2.0)

It was reported a fortnight ago that Apple would release the iPhone 5 without a built-in NFC chip; however, the New York Times reported several days later that two sources had come forward to say that Apple is definitely working on including NFC technology in an iPhone. The Times did say, however, that it was unclear which incarnation of the iPhone would carry the NFC chip.

Near-field communication facilitates the transmission of data over a range of approximately 10cm. An NFC-enabled chip in a mobile phone can interact with a proximity card reader to make mobile payments.

In an interview with ZDNet Australia, PayPal's Chambers said that shunning NFC was a general trend amongst manufacturers, merchants and retailers that were deciding not to implement payment hardware due to market uncertainty. Chambers added that if Apple decided to delay the inclusion of NFC, it would delay mainstream NFC adoption.

"You need that first trigger for [retailers and merchants] to follow," she said.

The inclusion of NFC in a device like the iPhone would make the technology mainstream, and lead to a wider take-up in the merchant and retailer space, Chambers said. She added that at least a year will now go by before NFC catches on as a mainstream technology.

Near-field communication-enabled devices coming to Australia this year includes Google's latest team-up with Samsung, the Nexus S.

Chambers said that the impact of the device in Australia is likely to be negligible.

"That came out in the States in about December but there's not much that happened there," she said.

"With only a handful of people having that device, you need to get significant scale before the technology takes off," Chambers added.

Chambers said, however, that PayPal had witnessed a dramatic increase in mobile payments using software and apps rather than hardware like NFC. PayPal now has 10 per cent of its 3.6 million Australian customers actively using its mobile payments app, according to figures taken in the last quarter of 2010.