Is Apple About To Cash In On Mobile Payments?

Apple has been in talks with the big players in the credit card industry to make advancements in the mobile payments space and is expected to unveil partnerships with Visa, MasterCard and American Express, according to a report from Bloomberg published earlier this week.

The news comes just one week before Apple's media event, where it is expected to roll out the iPhone 6 and possibly the company's first smartwatch.

Related: Time For The iPhone 6? What To Expect From Apple's Big Event Next Week

Apple is expected to use these partnerships to make a breakthrough in mobile payments by turning the iPhone 6 into a tool to pay for items in stores using the smartphone's NFC technology, turning the phone into a digital wallet.

If any company can make mobile payments take off, it's Apple, said James Wester, research director of global payments for IDC Financial Insights. Because there are so many moving pieces, it is unlikely that a mobile payments platform will be ready for the Sept. 9 event, he said.

"That it is only the first step toward making a payment process using their phones possible," said Wester. "There are still going to be issues with point-of-sale terminals, merchants and convincing consumers to put their cards into these digital wallets, the provisioning issues with the mobile network operators -- so there are a lot of things up in the air. It's a good start to start working with the card brand, but there are a lot of things still up in the air that Apple will need to work on."

Some Apple partners say that as much as they are anticipating the releases of the iPhone 6 and a potential "iWatch," they are also looking forward to this new mobile payment platform.

NEXT: Mobile Payments And Touch ID

"The mobile payment thing is very fascinating. If Apple is able to put NFC in the device, but are able to do something with the providers, that is really the thing to make mobile payments really take off," said Michael Oh, CEO of Tech Superpowers, an Apple partner based in Boston. "The question is, has Apple cracked that? Have they given credit card companies and merchants a reason to move into the new world? Touch ID is a really big part of it. The convenience it takes to pull out a credit card, you need that same ease of use on the phone. You can't unlock the phone and find the app and do all these steps for it to work. It has to be easy."

Oh compares mobile payments to Apple's launch of iTunes and the iPod in 2001, stating that mobile payments exist on a smaller scale the same way MP3 players were around before the iPod. After Apple had the backing of record companies and released iTunes and the iPod, however, it changed the music industry. Oh believes Apple could do the same with mobile payments.

"Mobile payment exists, but it hasn’t really taken off yet. You don’t really see it right now. Long term, it has potential to change a lot," he said.

IDC's Wester envisions Apple using Touch ID to confirm purchases to online retailers, the same way users can confirm purchases in the iTunes Store using Touch ID on the iPhone 5s. Using the preloaded credit card information on iTunes, users would be able to use the music platform to directly confirm purchases when shopping online at third-party websites with just the touch of a finger. There are more than 800 million accounts currently on iTunes.

"That is something Apple could do relatively quickly," Wester said. "That is a real solution to a real issue as it makes it easier to shop on a mobile device. It is not convenient to shop on a small screen when you have to punch in a ton of information."

PUBLISHED SEPT. 5, 2014