Apple has finally added near field communications (NFC) capabilities with its latest iPhone 6, which is likely to be a tipping point for increased uptake of mobile payment technology, says Telsyte analyst Rodney Gedda.

Apple's iPhone 6 and iPhone 6 Plus, announced overnight, both support 'Apple Pay', an NFC-based mobile payment service. NFC technology enables smartphones to communicate with other devices containing an NFC tag.

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"It's a positive step by Apple and it will definitely give mobile payments a short in the arm that it needs," said Gedda.

When users add a credit or debit card with Apple Pay, the actual card numbers are not stored on the device or Apple's servers. Instead, a unique 'device account number' is assigned, encrypted and securely stored in the secure element on a user's iPhone or Apple Watch.

Each transaction is authorised with a one-time unique number using the device account number, and Apple Pay creates a security code to validate the transaction.

Apple Pay is being supported by credit card companies American Express, Mastercard and Visa, as well as 220,000 merchants across the United States. It is unclear how many merchants and retailers in Australia will support the technology.

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"The infrastructure is already built out with chips in cards ... there's already contactless payments in other types of [smartphones] but it's not something that's widespread.

"Apple can bring a user-friendly way to pay for a cup of coffee or newspaper with your phone, another step towards not having to carry cash around," Gedda said.

"The end points are already there, it's a matter of meeting all the ends essentially. You need an app on your phone, NFC in the device, the terminal and the bank to clear the payment and all that's already built out with NFC," he said.

Gedda said NFC technology opens up other options including "peer payments" where users pay for services by bumping phones together, and in-app payments. NFC is also an access control technology, meaning it can be used for authentication, to start a vehicle, and provide access to a building, he said.

"So we might see some interesting applications with Apple's HomeKit aswell," he said.

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The new Apple iPhone 6 and iPhone 6 Plus will be available in Australia from September 19.

Meanwhile, Gedda said the new Apple Watch will also give wearables the 'shot in the arm' they need for different applications.

"Applications involving access control, health and fitness and even payments in the future. We are just at the tip of the iceberg of what's possible with wearables and the watch is the low entry point."

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