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Will Apple Try Killing the Wallet?

by Travis Harvey | November 10, 2009

A few months ago, Wall Street murmurs hinted that Apple applewallet wanted to build a service that would kill PayPal.  More recently, rumors suggest that Apple was testing RFID chip implementation into the next generation iPhone.  Combine these rumors and it seems to hint that Apple is after more than just PayPal.

Back in August, several articles popped up claiming that Apple wanted to build a payment system into iTunes that would allow users to make purchases on third party sites via their iTunes account.  The fees in payment processing are much smaller than the larger percentage cut Apple currently demands with its iTunes offerings.  With hundreds of millions of users with iTunes accounts around the world, the tiny payments would surely add to Apple’s revenue stream.

Reports emerged in early November that Apple has built new iPhone prototypes with hardware that supports RFID technology.  As AppleInsider notes, this development would allow for a number of “touchless technologies” but most notably, swipe payments.  Instead swiping a credit card, payment is received through waving the phone over a payment pad at checkout.  Payment would then be routed to a credit card through that person’s iTunes account.  It’s essentially the same idea as no swipe credit cards and Mobil’s SpeedPass except inside your phone.

With other companies like Facebook speculated to enter the online payment market, there’s going to be some stiff competition.  For Apple’s implementation to really take off, many stores would have to introduce payment pads that would play nice with the iPhone. Since these are all rumors, we may never actually see this idea come to life.  It’s a great idea, but Nokia has already tried and failed to make this mainstream, so Apple has quite the battle ahead.

If Nokia couldn’t do it, how is Apple going to? Do you think this would be a likely direction for Apple to take the iTunes Store?  Would they succeed if they did?  Let us know what you think!