Retail industry analyst Pablo Saez Gil of ResearchFarm is convinced that Apple's iWallet digital wallet will use Bluetooth 4.0 instead of Near Field Communication (NFC), despite the enormous amount of backing behind NFC for mobile payments.
His reasoning lies in the fact that Apple has yet to adopt NFC, even though big names like Google, as well as financial institutions and card operators such as MasterCard with its Paypass Wallet, Visa with the PayWave system and Barclays' Barclaycard, have all given NFC the go-ahead and designed digital wallets which enable consumers to tap a card or phone to readers in shops, or even tap-to-pay technology on ultrabooks.
However, Apple has aggressively upgraded its Bluetooth offering to Bluetooth Low Energy (BLE) on their entire portfolio of devices, with the new iPad and the iPhone 4S being the only major tablet and smartphone that had Bluetooth at the time they were shipped.
"[Bluetooth Low Energy] allows low-consumption chips to act passively in the form of stickers in a similar fashion to NFC tags and devices can automatically and passively connect and transfer information seamlessly," said Gil.
"The technology also enables long-distance connections between devices of up to 50m. This feature will eventually enable payments on the go, without the need of fixed POS and traditional checkouts."
The idea is that Apple could introduce an app that enables the Bluetooth transaction but relies on the cloud. This would completely negate the need for NFC, cash registers or even credit cards and thus allow retailers and SMEs to bypass costly hardware upgrades.
"Cloud-based payment solutions will produce the largest number of value benefits for retailers and consumers," said Gil.
"While NFC still has the largest momentum behind it, it is clearly losing steam. Payments incumbents are embracing NFC because it simply represents an update of their delivery format rather than a threat to their business model. Innovators are instead focusing on solutions that can be launched into the market right away and we think there is nothing more ubiquitous and ready-to-use available today than the cloud.
"In contrast, cloud-based payments can gain mass adoption overnight, as cloud-based payment solutions will arrive in the form of mobile apps, be they digital wallets or mobile retailer apps."