Apple Making Moves in P2P Payments

By April 09, 2010

Apple has patented technology for NFC payments on the iPhone and iPad, and is expected to include the functionality with OS 4.0. The nominally open App Store vs. Apple’s preference for a closed system is a strange dichotomy.

It seems like these NFC patents are aimed at eventually replacing 3rd party apps like Square and PayPal.

Part of the Apple’s patent is for a near-field iPhone ‘cash register,’ putting them in a space close to Square, the iPad app that’s been getting the most positive buzz. Square, turns the iPad into a cash register, processing credit card transactions. Square’s free dongle allows merchants to use the iPad as a credit card reader, which opens up a whole new payments space.

Square isn’t the only company looking at this space. Blue Bamboo just released a similar app for the iPhone.

The other part of Apple's patent is aimed directly at PayPal, which recently announced that its iPhone app reached one million downloads in three weeks.

PayPal has made so many advances in the last few months that it’s hard to see any other players moving into P2P payments. Unless of course it’s the player that owns the ecosystem.

Granted, a PayPal app for all smartphones would have a significantly larger reach than an Apple-only product, especially if trends like Google Android’s gaining market share continue. At the same time, as we saw again this week (if we needed any more proof) no one trains consumers better than Apple does.

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