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Soon You Will Be Able To Use Your iPhone To Pay For Things

iPHone PaymentsApple is working on starting a mobile payment service that will be available as early as mid-2011 and lets consumers buy digital movies and music by using their iPhone. Using the service consumers walk into a store and make payments straight from the device. They also receive loyalty rewards and credits from the purchase, plus direct advertisements based on purchasing trends.

It would allow Apple to help improve ad targeting and charge higher fees for those ads. Essentially it would personalize the iAd advertising network by offering advertisers a way to target ads in places where customers are spending money. Potentially this could mean double or triple ad rates.

According to Bloomberg, Apple has already created a prototype device that lets small businesses receive payments and is considering subsidizing it or giving it away to encourage nationwide adoption. This could also help boost device sales specially for iPhones and iPads, Apple’s current cash cows.

A patent for a system that uses NFC (“Near-Field Communications”) has already been filed by Apple. The system allows applications running on Apple devices to communicate with each other and share information.

One reason why NFC services hasn’t taken off for payments is the lack of hardware support. Credit card companies are not ready to change something that is already working, but Apple is a game changer. Apple likes to disrupt and change the way people do things. It always sees outside the box and this new payment method could catapult the company to new heights if the technology is embraced quickly.

Photo Courtesy of Incase.