Last week, Jack Dorsey took the wraps off of Square, a new payment service that lets anyone easily accept a credit card payment. While Square is certainly a near term solution, Apple may be focused on the same opportunity with the next version of the iPhone. Rumor has it that Apple will include an RFID reader into their next iPhone, potentially ushering in the era of payments using your mobile phone. Building in an RFID reader is one thing, but it only matters if businesses begin adopting RFID tags in retail establishments to go with them.
What’s interesting is how this plays into Apple’s strategy regarding the (mythical) tablet. While the consumer could use an RFID equipped iPhone to purchase products, the merchant would likely want some device to show what is being purchased and visually verify the process as the transactions take place. Theoretically, the merchant could also use an iPhone for this purpose, but the small screen size would make the merchant’s user experience rather poor, especially if typing would be required. Moreover, the tablet’s big screen would make it more appealing, especially if it can be paired with Apple’s wireless keyboard.
With these hardware elements in place, Apple could disrupt the lucrative cash register segment, by making it feasible to be cash less. The tablet could become the de facto standard device for businesses to have to handle payment, and the iPhone could be the device we all use to acquire information about a product and pay for it on the spot.