iPhone 6: How iPayments could replace credit cards.



The new iPhone 6, which Apple is expected to unveil next week, will come with a built-in "iPayment" system that could end the need to carry multiple credit and debit cards, according to the latest reports.

The system would let a user connect his or her iPhone 6 to a range of accounts, and then pay for goods and services by placing the handset on a reader to check out. Payments would be authorised using the iPhone's Touch ID fingerprint reader.

"Apple has reached an agreement with American Express to work together on its new iPhone payments system," the technology news site Re/code reports, citing "sources familiar with the talks".

Bloomberg later reported that Visa and Mastercard are also onboard, and added more technical details about how the system will work.

"The new iPhone will make mobile payment easier by including a near-field communication chip for the first time," it says.

Near-field communication (or NFC) allows data to be transferred between a device and a reader when one is placed close to the other - allowing phones to be used in the same way as contactless debit cards or Oyster cards on the London transport network.

NFC is not a new technology, but has yet to enter mainstream use despite its inclusion on many rival phones.

Fraud is likely to be a key concern for both customers and retailers signing up for the system, but according to Re/code the technology will prove secure. "Industry sources say Apple believes its iPhone payments system will be as least as secure as traditional payment cards," it says.

Commentators say that excitement about the iPhone 6 could help to popularise the technology.

"Apple's large contingent of devoted iPhone users make a mobile-payments system more attractive to a greater number of merchants," says Time. "And the fact that Apple already also has so many iTunes accounts on file means users may be more inclined to try out the service."

According to CNET, 800 million iTunes account holders have entrusted Apple with their credit card details. Those customers are likely to be able to take advantage of the iPhone 6's new payment system without too much form-filling, which often creates an obstacle to new payment systems.