Apple, what's in your wallet?

It’s not official, but good journalists at Wired and the Financial Times reported Thursday that Apple’s next generation of consumer devices — iPhones for sure, wearable devices maybe — will come equipped with a NFC (near field communication) chip for making mobile payments.

This is big news, in part because Apple is so late to the NFC party.

The rest of the world switched to the technology years ago. Google, Samsung, Nokia, Sony, Blackberry, Visa, MasterCard. It’s the way credit cards talk to banks and retailers in most of the countries of Europe and Asia.

But not in the U.S.

That’s about to change. Visa and MasterCard have set an October 2015 deadline for U.S. retailers to switch from magnetic strips to embedded chips. If Apple wants in on the game, now’s the time.

In April, re/Code’s Jason Del Ray reported that Apple was holding job interviews with senior payments industry executives. In July The Information’s Amir Efrati reported that discussions between Apple and the payments industry had heated up in advance of the launch of what the tech press is calling the “iWallet.” The Financial Times reported Thursday that Apple has tapped the Dutch chipmaker NXP to supply the NFC technology.

Apple can’t change the way most Americans pay for things. As Stratechery’s Ben Thompson observes, it’s hard to disrupt cash and credit cards because they both work pretty well.

But for Apple’s customers — the “affordable luxury” crowd — the pieces of a new payment platform are falling into place.

In her report on an NFC-equipped iPhone, Wired’s Christina Bonnington ticked them off:

More than 800 million credit card numbers on iTunes
An installed base of 300 million bluetooth-equipped iPhones
A fast-growing network of Bluetooth-LTE transmitting iBeacons
A patent on dual-use NFC and bluetooth payment system
A patent on storing financial data in a “secure element”
A patent on a payment system that is location and context aware

According to Bonnington, the payment platform will be one of the tentpoles of the Sept. 9 press circus in Cupertino.

Whether any part of the system works for people who own older iPhones — or for people who can’t afford Apple’s products — remains to be seen.

Correction and clarification: Reader James Wester (@jameswester) suggests on Twitter that I’ve just conflated NFC and EMV. I’m sure he’s right. EMV, which stands for Europay, MasterCard and Visa, is the international standard for credit card reader interoperability. According to Datacard Edge

“NFC technology isn’t directly associated with financial transactions like the EMV standards. One of NFC’s applications, however, is enabling contactless payments via mobile devices, in addition to its much broader applications for data transfer, keyless door entry and much more.” See EMV vs. NFC Technology: Setting the record straight.

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