iPhone NFC?

Apple's NFC technology is planned to be embedded in the next iPhone and iPad 2, which would allow customers to use their device to make purchases.

Apple plans to introduce “Near-Field Communication,” services, reports Bloomberg, that would let customers use its iPhone and iPad computer to make purchases.

According to Richard Doherty, director of consulting firm Envisioneering Apple’s NFC technology is due to be embedded in the next iPhone for AT&T and the iPad 2. Both products are likely to be introduced this year, he said, citing engineers who are working on hardware for the Apple project.

Nokia, the world’s largest maker of mobile phones, has pushed NFC adoption for years, though the technology has been slow to take off in the United States. Nokia says that from 2011 on, every Nokia smartphone will have NFC.

Last November, AT&T Mobility, Verizon Wireless, and T-Mobile announced the creation of a new mobile payments network, called ISIS that would use NFC. Former GE Capital executive Michael Abbott has been hired as Isis CEO. Isis’ initial focus will be on building a mobile payment network that utilizes mobile phones to make point-of-sale purchases.

In the summer of 2010, Visa launched wireless payment trials with four banks — JPMorgan Chase, Wells Fargo, US Bankcorp and Bank of America. That trial used technology from DeviceFidelity, which created cases for the iPhone 3G, 3GS and iPhone 4 that incorporates a microSD card using Visa’s In2Pay technology.

Apple’s service may be able to tap into user information already on file, including credit-card numbers, iTunes gift-card balance and bank data, said Richard Crone, who leads financial industry adviser Crone Consulting LLC in San Carlos, California.

That could make it an alternative to programs offered by such companies as Visa, MasterCard and EBay’s PayPal.

So far, only the Samsung’s Nexus S, in the United States, promoted by Google has NFC, but other phones and tablets are expected to have NFC soon.

Near Field Communication enables the exchange of data between devices over about 4 inches (10 centimeters). It combines the interface of a smartcard and a reader into a single device and communicates via magnetic field induction.

Two loop antennas are located within each other’s near field. The phone contains your identity, but the tag is just a magnetic loop. It doesn’t need batteries. It can be embedded in a poster or sticker, and can be stuck to menus or store windows. It’s like RF-ID, with a unique identity number, but doesn’t require a separate reader at the store (like a smartcard) to make a transaction. You just place your phone on the tag and press a button. NFC operates in the unlicensed ISM band at 13.56 MHz.

Your phone provides your identity and security. Of course, you don’t want to lose your phone. The security issues may take some time to work their way through general public acceptance. NFC could be convenient. Mobile ticketing in public transport and mobile payment, where your phone acts as a debit/credit payment card, are envisioned.

Google’s Hotpot is testing its first local marketing campaign in Portland, Oregon. Google’s Hotpot (not to be confused with “hotspot”), lets you rate places and add friends to get personalized recommendations whenever you search for places on Google.

Google’s Near-Field Communication technology is currently available only on Samsung’s Nexus S phone, which runs Android and is being tested in Portland, Oregon.

As shipped, Android 2.3 Gingerbread only allows tag reading. This means that the Nexus S, the first Gingerbread handset, can only so far retrieve information from pre-programmed near field communication tags. But Google has promised that write functionality is on the way soon with some upcoming extensions to the SDK. An NFC development house in Argentina, Gibraltar, has unearthed the write tags.

For all of Google’s strengths, they have not been able to nail a payment processing system, observes TechCrunch. They have Google Checkout, but customers clearly prefer competitors like PayPal, which has about 90 million active credit card accounts. Apple, on the other hand, has over 100 million accounts set up with built-in credit card access. The main goal for Apple may be to get a piece of the $6.2 trillion Americans spend each year with credit cards.

Written by: Luke Pensworth

Luke is the managing editor and site manager of Dailywireless. As a wireless enthusiast/consumer, he reviews a lot of services based on his own experience. Disgruntled as he may be, he tries to keep his articles as honest as possible.