New iPhone to function as credit card

Apple’s forthcoming iPhone 5, which is due in the Spring of 2011 and will come with a built-in near communications field, could pave the way for easier credit card payments.

Some believe the NFC technology, a short-range wireless communications technology, may prove to be a crucial step in what could become the new payment system standard.

With the new technology, the iPhone 5 could open the door for mobile wallets, allowing users to carry cash and credit without the leather, according to a report by Silicon Republic. This would also eliminate the necessity of PIN numbers for small in-store payments.

The announcement marks the latest steps the cell-phone industry has taken to replace traditional magnetic-stripe credit cards. With increased identity theft protection, the cards could also help stem the $447 million in revenue that lenders annually lose to fraud, the news source reports.

In 2006, Apple installed point-of-sale stations in its flagship stores, which enable contact less debit and credit card payments, according to the Republic.

Facebook and Google are among the other companies hoping to develop a similar program.