Watching Analysts Watching Apple

Speculating about Apple’s involvement in mobile payments is an analyst parlor game based on nothing but bread crumbs and intuition. The latest bread crumb to drop comes from Pablo Saex Gil of ResearchFarm. His sense, laid out below, is that Apple will use Low Energy Bluetooth as its payment technology over NFC.

Pablo Saez Gil of ResearchFarm speculates Apple has done nothing, other than secure patents, to indicate its interest in NFC, a technology he believes possibly has hit its high-water mark and could begin to see industry interest wane as a mobile-payments technology. Instead, Apple could be far more interested in a cloud-based approach, where it could create a software application that enables Bluetooth technology to support transactions but rely on the cloud for data storage and payment-gateway entry, he asserted in a “Future of Mobile Payments 2012” report for ResearchFarm in late April.

In fact, Apple already has incorporated Bluetooth Low Energy technology into its new iPad and iPhone 4S products, with upgrades available for older products, Gil stated.

Apple could eliminate the need for NFC, cash registers or payment cards, which could be music to merchants’ ears as they contemplate EMV hardware upgrades or new equipment in the U.S. And considering Apple retail outlets already operate in a mobile-payment environment lacking traditional payment terminals, it is not a far-fetched theory.

Mostly, Gil embraces the premise that Bluetooth Low Energy allows low-consumption computer chips to act passively in the form of stickers, similar to NFC tags and devices that automatically connect and transfer information.

Bluetooth Low Energy is, indeed, an interesting approach that, from a technical use case point of ivew, could be applicable to payments.

But, here’s the thing. Transaction origination and communication approaches are multiplying like rabbits. While NFC could become the dominant method of tap and go payments, other approaches that use the phone’s camera to read a barcode, an app that uses geofencing, and more are out there. And we’re just beginning this process of having ridiculously capable and complex sensors on our hips in the form of a smartphone-based compass, accelerometer, GPS, Wi-Fi radio, Bluetooth, and more. So, while NFC has the lead in the race, it is likely there will not be one winner this time.

As for Apple’s plans, do read this post for a good discussion that captures the consensus of all of us completely out of the loop. I’ll just plead ignorance and quote the saying on a tee shirt that one can only buy at 1 Infinite Loop, Apple’s Headquarters. “I visited the Apple Campus. But that’s all I’m allowed to say.”

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