It's all about iPhone 5

Apple has now announced release of the updated version of itsparadigm-shattering smartphone – mark your calendar for productrelease on Sept. 21 (pre-orders start Friday, Sept. 14) – and thebig question has to be exactly what impacts will the device have onmobile banking and mobile payments?

For starters: unlike with last year's release of the phone thatwas named the 4S, there were no advance rumors (at least not fromcredible sources) that this year's iPhone 5 would have NFC (NearField Communications) to turn the phone into a genuine digitalwallet.

The 4S disappointed some by shipping without NFC. And the newphone also does not have NFC. That technology apparently just isn't ready for Cupertinoprime time.

But don't think the latest Phone is a yawner for financialservices. Analysts in fact see immense ripple impacts of the devicethat just may shape how credit unions interact digitally with theirmobile customers.

Novantas'Ethan Teas, in an interview, said that to his eyes the biggestimpacts will come from the “downstream impacts of other iPhonemodels.” HIs point: if the analysts are right and more than 10million iPhone 5s sell in Q4 in the U.S. alone, this may put lotsof used, older iPhones on the market, cheap, and Apple is alsoslashing prices on old iPhones ($99 for the one year-old 4S; thetwo year old 4 will be free, with a two year contract).

This will put downward pressures on pricing of smartphones otherthan iPhone (and Samsung Galaxy 3, an Android device that is keeping pace withthe iPhone). Motorola, Nokia, HTC and the others may have to startoffering tasty discounts to lure buyers away from the glitter twinsatop the smartphone sales charts.

The upshot: an ever-increasing number of members will ownsmartphones and they will want apps for the banking.

Current numbers place smartphone ownership in the U.S. at 55% — butwatch that move nearer to two in three early in 2013 as iPhone 5mania sweeps the nation.

The pressures on financial institutions to provide beefy apps –ones that permit bill pay along with balance checking – willintensify as more Americans pack smartphones in their pockets.

Meantime, Gene Signorini, a vice president at Mobiquity, said that Passbook – a kind ofdigital wallet integrated into the next generation mobile operatingsystem from Apple, iOS 6, which will be central to iPhone 5 andapparently will also be available for some earlier models of iPhoneand iPad – may have disappointed some observers for what it isn't(it isn't a tap-and-go-enabled payment tool).

But, said Signorini, “Passbook is a Trojan horse that will getApple into payments. It also is an important first step for gettingconsumers into mobile payments.”

As announced, Passbook is a tool for storing loyalty cards,movie tickets, even airline tickets, in a single app on the iPhone.But, from there, it may be a fast hop into implementingbarcode-driven mobile payments and Apple certainly has that on itsmind.

But whether Apple goes there, or not, Signorini's bigger pointis that Apple, traditionally, has avoided bleeding-edgetechnologies. Its comfort zone is around improving technologiesthat are already proven (such as the MP3 music file format whichApple figured out how to monetize with iTunes). That's exactly whatit is doing with Passbook.

“Passbook will be easy to use out of the box. It will get peoplethinking about the phone in connection with transactions,” saidSignorini.

Sam Lakkundi, chief mobile officer at Kony,also sees nothing but pluses for mobile banking in the iPhone 5. Hesaid Apple has indicated that it is providing tools that will allowdevelopers to beef up security and that, he said, will helpreassure members who still cite security worries as a primaryreason for not using mobile banking tools.

Lakkundi also pointed to the sharper, larger screen on theiPhone 5 as a draw for older members in particular.

Bottom Line: iPhone 5 may not have delivered what some had hopedfor (notably, no NFC) but experts believe the smartphone revolutionmay be kicking into a higher gear and that is a message no creditunion can ignore.