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No NFC for iPhone 5 - Brilliance or Blunder?

Posted on Sep 26, 2012

Blog by:   Leilani Doyle

The iPhone 5 hit the stores this week and is now being proclaimed by CNet as “the iPhone we’ve always wanted”.  It’s large screen, light weight and lightening fast Internet is surely going to satisfy consumer’s demands for Apple quality products.  But it is missing what many in the payments industry would consider a key component – NFC or Near Field Communications. 

While other notable players in the industry including Google and many of the phone networks are betting on NFC to be the enabling technology for mobile payments, Apple chose to eliminate this battery drain from their iPhone 5.  Personally I believe it is a smart move on the part of Apple, since despite all the hype, the public is just not that ready for contactless payments.

It is no secret that I believe NFC will go the way of the Betamax.  Anyone remember that technology battle from the 80’s over home video?  Right!  I think that is what we will be seeing with NFC over the course of the next five years.

NFC is a technology that has too many barriers to entry to make it the ubiquitous mobile payment choice.  Apple is much better positioning the Passbook to quietly build the demand for payments, while enabling loyalty cards, coupons and special offers.  This approach will generate a level of consumer acceptance of your mobile phone as a wallet and then add payments in as the final pièce de résistance.

One thing is certain, mobile payments will earn their place in the spending habits of US consumers over the next five years. 

For additional information about Apple’s strategy and the iPhone5 please also see the following articles:

Why did Apple launch without nfc? Guest post from Jonathan Jensen

iPhone 5 full review: Finally, the iPhone we've always wanted

Does 400 Million Accounts Give Apple the Power to Create a Payment Network?