How You’ll Be Able to Use Your iPhone 6 as a Wallet

Apple is expected to unveil the iPhone 6 on Sept. 9, and rumors about some possible features have been years in the making. One of those features is expected to be Apple’s big foray into a mobile-payment system, which would allow users to make purchases on the go with just their iPhones instead of their wallet. But if ditching cash and debit cards for one device sounds like a nightmare from the future, don’t be alarmed. Here’s what you need to know about what Apple might be planning and what the system could eventually look like.

How would I use my iPhone to pay for something?
The way you pay for anything else while shopping — visit a store, walk up to the register, present your method of payment (cash, credit card or, in this case, your phone) and make a transaction. The exact specifics of how these transactions will work is unclear, but it’s likely to function like an expanded version of the iPhone’s Passbook app, which allows users to store tickets, boarding passes and coupons with bar codes that can be scanned.

What technology would allow mobile payments to happen?
Wired, which reports that mobile payments “will be one of the hallmark features of the [new iPhone] when it’s unveiled,” says that near field communication (NFC) will be a major part of the feature. NFC is a way for devices to wirelessly exchange small amounts of data over very short distances, usually within a few centimeters, often by tapping one smart object against another. While devices using Bluetooth technology have to be set up to work together, the presence of a NFC chip in the new iPhone would allow for secure transactions quickly and easily.

Would it work the same for every store?
One patent discovered by AppleInsider in 2013 “describes an e-wallet system that would provide users with “smart menus” based on the context of a transaction.” That would suggest that Apple’s mobile-payments system will eventually be equipped to offer different payment options depending on the store or retailer — so, for example, it might determine which store you’re in based on your location, and charge money to the same card you used last time you were there, or take advantage of rewards programs linked to a particular card.

How might it process payments?
Through iTunes. One patent Apple was granted in 2012 “shows us that the credit card companies will be sending statements directly to your iTunes account,” according to the blog Patently Apple, which tracks the company’s intellectual property news. Apple has 800 million iTunes accounts on file, most of which are linked to credit cards — that’s believed to be larger than the number of accounts on file at either Amazon or PayPal.

What credit-card companies are on board?
Bloomberg has reported that Apple has made agreements with Visa, American Express and MasterCard. The American Express news was reported earlier Sunday morning by Re/code. The Information previously reported that Apple and Visa had reached an agreement.

How do we know Apple is interested in this?
Apple has been pursuing iWallet-related patents for a few years now. Earlier this year, Apple was also looking to hire a few executives with experience in the payments industry to build “a business around the hundreds of millions of credit cards it already has on file,” according to Re/code. Apple CEO Tim Cook also said that there is “a lot of opportunity” with mobile payments during an earnings call in January:

Who else has tried this?
The Google Wallet system allows users to store information from all kinds of cards (credit, debit, gift, loyalty) and pay stores and friends using NFC technology. PayPal also allows users to pay retailers, restaurants and more through its mobile app. In terms of hardware, phones like the Samsung Galaxy S5 have had NFC services. But mobile payments like these haven’t exactly become widespread. That may change as Apple’s large contingent of devoted iPhone users make a mobile-payments system more attractive to a greater number of merchants. 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, as they may not have to go through all the steps a new service would require.