Apple Inc. plans to turn its next iPhone into a mobile wallet through a partnership with major payment networks, banks and retailers, according a person familiar with the situation.
The agreement includes Visa Inc., MasterCard Inc. and American Express Co. and will be unveiled on Sept. 9 along with the next iPhone, said the person who asked not to be identified because the talks are private.
The new iPhone will make mobile payment easier by including a near-field communication chip for the first time, the person said. That advancement along with Touch ID, a fingerprint recognition reader that debuted on the most-recent iPhone, will enable consumers to securely pay for items in a store with the touch of a finger.
While companies including Google Inc. have invested in creating ways for phones to make payments in a physical store, U.S. retailers have been slow to adopt the technology, thus limiting its use by shoppers, according to Ben Bajarin, an analyst for Creative Strategies LLC in San Jose, California. That could change with Apple entering the market because iPhones have the largest market share in the U.S., he said.
Love it or hate it, Apple drives a lot of standards in the industry, Bajarin said in an interview. They are the mover in these markets. When they do something, the industry seems to follow.
Trudy Muller, a spokeswoman for Cupertino, California-based Apple, declined to comment, as did Jim Issokson, a spokesman for MasterCard. Representatives from Visa and American Express didnt immediately respond to requests for comment.
Re/code earlier reported that Apple had reached an agreement with American Express on the payments plan, citing sources familiar with the talks.
For Apple, the push into creating a mobile wallet is to keep users within its system, thus creating more loyalty to its brand and buying of its products, Bajarin said.
Its about retention, solving and adding features that keep your base engaged and keeping them loyal, Bajarin said.