Apple is partnering with payment processors such as MasterCard, Visa and American Express to turn its next flagship iPhone model into a smart payment device through a wallet service.
Bloomberg, citing a person familiar with the situation, reported that the iPhone maker is framing an agreement with the payment service providers, which will be unveiled along with its new iPhone on 9 September. All the companies have not comment on the news.
The source told Bloomberg that the new iPhone will make mobile payment easier by including a near-field communication (NFC) chip.
The feature will be secured with Touch ID, a fingerprint recognition reader that Apple introduced on its most recent iPhone.
In addition to setting new standards in the industry, the new move by Apple is expected to generate more revenues for the company, which has about 800 million iTunes accounts across the globe with payment information already included.
If Apple's mobile wallet takes off, the iTunes marketplace could transform itself into a new marketing platform, generating advertising revenues from consumer brands, Richard Crone, CEO of Crone Consulting LLC, told Bloomberg.
Crone estimates that a frequently used mobile wallet application could generate about $300 a year per user from advertising.
Technology blog Wired had earlier reported that Apple would make an NFC-enabled payment platform one of the "hallmark features" in its new iPhone.
A Financial Times report claimed that Dutch chipmaker NXP is working with Apple to provide the NFC chips.
Despite mobile payments being around for a number of years, through platforms like Google Wallet, they have yet to attain mainstream adoption.
While the adoption rate is higher in certain countries like Japan, in the UK mobile payments are mostly limited to small transactions at fast-food outlets and coffee shops.