Get ready to retire that worn leather wallet. If some of the country's biggest tech companies have their way, all the plastic cards crammed into your billfold will soon find their way into your phone.
Apple is planning to introduce a service that would let consumers use their iPhones and iPads to purchase products, essentially turning a user's cell phone into a credit or debit card, according to a Bloomberg report.
Citing Richard Doherty of consulting firm Envisioneering Group, the report said Apple plans to embed NFC (near field communication) chips into its next generation iPhones and iPads that can beam and receive information within a distance of up to 4 inches.
Instead of swiping plastic to pay at the register, a user could just take out a cell phone and wave it near an NFC-enabled reader. The purchase amount would be deducted instantaneously.
When reached by ABCNews.com, Apple spokeswoman Natalie Harrison said the company does not comment on rumor and speculation. But the report has industry watchers buzzing about the potentially game-changing technology that could eventually transform cell phones into so-called digital wallets.
Although Apple hasn't yet publicly declared its support for NFC technology, other major stakeholders, such as Google, Samsung, Nokia, Research in Motion (RIM) and cell phone carriers AT&T, Verizon and T-Mobile, have already started lining up behind it.
Google's latest Nexus S smarphone from Nexus is NFC-enabled, and Nokia and BlackBerry's RIM have said that they intend to offer more NFC phones in the near future.
Gwenn Bezard, co-founder and research director at technology research firm Aite Group, said that regardless of whether the Apple NFC plans are true, the technology is poised to take the mobile industry by storm.
"It's not a matter of if Apple is going to come up with something, it's a matter of when," he said. "Whether it's going to be this year or next or the year after, I think there's a very high chance that Apple and other companies will push NFC payments."
The pay-by-phone market is expected to make up $22 billion in transactions by 2015, according to Aite Group. That's "still a drop in the ocean" compared to the total amount consumers spend in the U.S., Bezard said, but considering that the pay-by-phone market is about nil right now, Aite's research still shows that the market is accelerating.
Bezard said big companies are getting behind the new technology because it significantly boosts the level of interactivity between consumers and merchants by integrating payment, marketing and promotion at the point of purchase.
At a CVS checkout counter, for example, a user wouldn't need to pull out a credit card, loyalty card and coupon to score a deal on toothpaste. She or he could just use a cell phone payment system that rolls all those streams of information into one.
For consumers, pay-by-phone services mean more convenience and a potentially easier way to manage and save money. For corporations, it increases the potential for targeted mobile advertising and data collection.
Just this month, Starbucks introduced a nationwide mobile payment system that lets users pay for coffee with an application loaded on their smartphones.