iPhone 5 & iPad 2 expected to act as credit cards using NFC

Apple fans around the world are expecting the company to introduce new versions of the iPhone and iPad at some point in 2011. While we can guess at what Apple has done to the design of the smartphone and tablet, Richard Doherty, director of consulting firm Envisioneering Group, believes the iPhone 5 and iPad 2 will be the first to act like credit cards.

For such a feature to be offered, Apple would have to fit both devices with a near-field communications (NFC) chip. Such a chip would allow a user to swipe their device near a payment point (no more than 4-inches away), then a confirmation screen would appear on the iPhone or iPad, possibly with a verification code required, and the transaction would be complete.

Such a system is desirable to users as the whole process is handled on their own device. It also opens the way for transferring money between two phones. For Apple, it’s desirable as they could take a cut of the transaction in fees opening up yet another revenue stream for the company.

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