Apple Expected To Enter Digital Wallet Space Following Deals Reportedly Inked With Amex, Visa & MasterCard

Apple is being reported to have reached agreements with American Express, Mastercard and Visa for their new digital wallet software that is expected to launch with iOS 8. The invite that went out recently to technology journalists about the Apple launch event on September 9 is tipped to include several announcements including one showcasing their new iWallet.

NFC Payments

The idea of mobile payments to pay for goods and services is not a new one. Near-field Communications (NFC) has been present in several Android operating systems as a payment method to beam across transaction information and authenticate users in order to pay for a bill at the checkout.

Already large retailers in America like Walgreen drugstores will accept NFC-enabled credit cards and Android devices with NFC capabilities like the flagship Samsung Galaxy S5 smart phone to pay for their drug and beauty accessory purchases. The difficult thing with NFC is that whilst it has become more prevalent with today's smart phones, it isn't present in the low to mid-range phones but more the luxury end of the market. Phones like the Samsung Ace 3, a mid-range Android phone with a 540p display, dual-core chipset and 4-inch display lacks a NFC chip other than with the little seen LTE model that's only available in certain markets.

So far market adoption has lacked the push necessary to make NFC transactions commonplace and thereby lies the problem.

iPhone Advantages

The advantages that the iPhone has is that at least some models already come with a Touch ID fingerprint scanner which is perfect for authentication prior to sending a payment to a retailer. If an app could be coordinated in America for easier credit and debit card processing via the major merchants like Amex, Visa and Mastercard, then this would clear the way to making digital payments at the checkout far more commonplace.

Another Market To Disrupt

Apple has the opportunity to disrupt the payment systems in place and perhaps receive a cut of the transaction value in conjunction with the credit card processors, depending on the deal they've struck. A reshaping of yet another industry by Apple could well be on the cards.

Whether Apple will actually adopt the NFC standard but use their new agreements with Amex, Mastercard and Visa to move the mobile payment process along to a natural conclusion remains to be seen. Reports about the likely adoption of NFC-compatible payments have gone both ways as the rumor mill runs rampant ahead of the Sept 9 event.

Mobile Payments Not New

Mobile payments have been around in some form at least for the last couple of years on modern cell phones. The Google Wallet app existed in the second quarter of 2011 and separate apps from PayPal and Visa have so far failed to gain much traction in the marketplace. Can Apple provide the answer and will any solution they come up with be proprietary or help owners of smart phones on other platforms too?