NFC, Apple and PayPal, the perfect storm, is the kind of thought that keeps Banks, credit card companies, Google and Isis up at night

It was suggested today that if Apple and PayPal got together for NFC payments, it could rip a hole in the banking subspace continuum. Even thoughts like these are blasphemous around the Google campus, because of the potential domination and disruptive force the two companies would create in their wake. Well, that and the fact that Google has opened up shop against both companies after being on friendly partnership with both. There hasn’t been such a potentially powerful partnership suggested since bread and butter, or salt and vinegar on chips. It seems such an obvious partnership, but it took an Australian named Rod Farmer, Director of Research and Strategy for Mobile Experience, at the AIIA in Sydney this morning to mutter such a concept in public. As the words left his mouth and hit the internet, one hundred thousand tech reporters around the globe realized it would be the “perfect storm for disruption” as Farmer put it, and immediately broke out into a cold sweat, and went and hid under the stairs.

If Apple releases an NFC iPhone 5, iPad 3… and partners with PayPal

At the moment, the NFC payments landscape is filled with many companies that have to come together to make the system work. Bank, merchants, credit and debit card issuers, TSMs (trusted service managers) and telco’s. NFC payments represent a full on ecosystem that requires many hands to make light work. Where as this adds strength and the potential of faster widespread acceptance for the new payment standard, it does slow down the roll out. PayPal has existed outside of this arena and has formed its own ecosystem and relationships with banks and online merchants over the years and is in a very strong position to mount an alternative structure to the industry where it alone can handle the vast majority of skills required to operate an NFC payments system.

Apple are the past masters in cooking software and hardware together and getting it into the hands of millions of people. Renowned for their ability to create experiences and marketing hype beyond any of their competitors, the company takes more and more smartphone market share every quarter. Rumors have persisted that Apple is working on an NFC iPhone, iPad and even an NFC iPod over the last six months or so, although the company has said that it intends to leave NFC for another year as it doesn’t feel NFC has matured enough yet. PayPal has admitted that NFC is part of its business model, but has recently backed off from an announcement stating that it feels the technology will take time to mature. Both companies have said the same thing.

When NFC, Apple and PayPal collide

Remember this is not a rumor and is merely a concept cooked up in the mind of an industry thought leader, but let’s look at it as if it is a rumor just for fun.

PayPal has 100 million PayPal account users and gob loads of merchants. Over the last year or so, the company has also scooped up GSI commerce, Zong, Magento and Milo which helps it expand out further in e-commerce, social network payments and local shopping. PayPal has also recently released an NFC app for Android that uses NFC to make person-to-person payments and stated in a lawsuit against Google that executives from El’ Goog has stolen trade secrets from PayPal to build its Google Wallet product offering. Oh PayPal, you are so cooking up an NFC mobile wallet of your own and it is so obvious. PayPal is in fact rumored to be building a portfolio of services that transcends NFC payments and fits into pretty much every facet of life, from social networks to brick and mortar stores, from person-to-person payments to mobile remittance. PayPal is looking like it has non-NFC payments and NFC payments covered so can operate in pretty much any situation. PayPal is gearing up for the prime time, the writing is on the wall. Isis and co, beware.

Apple has around 225 million credit cards on file in iTunes, has millions upon millions of iPhones and iPads out in the marketplace. Apple is also about to launch new products out of schedule and have even put back the release of their latest iOS release for an unexplained reason. It doesn’t take a genius to work out they are up to something. Apple has more NFC patents than they know what to do with. Over the past couple of years the company has amassed a staggering portfolio of patents that use NFC in a whole host of apps that represent payments, ticket management and sales, travel and cruises and that is not even mentioning the hardware concepts the company has patented that relate to TV’s, Mac’s and other peripherals. There have even been suggested partnerships between QualComm and Apple which could suggest that the NFC hardware and low level software is in place. It isn’t a matter of if Apple will support NFC, it’s a matter of when.

Both companies are holding back from announcing or publicly supporting NFC. Both organizations have said that they are holding off launching NFC products, but both companies have made statements that they expect to have robust growth in the latter half of 2011. eBay’s CEO let slip that everyone would have trouble competing with PayPal and unless they have a Harry Potter liquid luck potion up their sleeves, it would be hard to imagine how this could happen with major partnerships we are yet to hear about. Sun Tzu said the enemy of my enemy is my friend and if that is the case, Google may be in for a rough ride. Both Apple and PayPal are gearing up for the wonderful world of NFC & NFC payments, we now find ourselves wondering if they are maybe, just maybe, working together a diabolical plot to rule the payments world. NFC, Apple and PayPal could happen, but let’s wait and see what September brings.