After Apple Pay, NXP Pitches Tap-to-Pay Technology to Car Makers

NXP Semiconductors is taking advantage of the recent excitement around Apple Inc's new mobile payment system with the tap-to-pay technology built into the newest iPhones by pitching it to car makers.

Apple's inclusion of near-field-communications, or NFC, in its latest smartphones and its Apple Pay system unveiled last month has given a long-awaited seal of approval to the technology.

"Once they saw these announcements in September they kind of realized there was no going back on this technology so they better get moving and be quick on it," Drue Freeman, Senior Vice President for global automotive sales & marketing at NXP, said of the car executives he has spoken with recently.

NFC lets smartphones communicate wirelessly with other devices such as point-of-sale terminals by holding them close together.

NXP dominates the market for NFC and supplies the chips used in the new iPhone 6 and iPhone 6 Plus, according to repair firm iFixit, which has opened the devices. NXP declined to say whether it supplies Apple's NFC chips.

The chips are also used in Android phones, credit cards, commuter cards, video game consoles and medical tools.

Apple's digital wallet, which it rolled out with a handful of retailers last week, has attracted the attention of automotive executives and made them more interested in potential uses of NFC in cars, Freeman said.

(Also See: Apple Pay Battles Wal-Mart and Allies Over Mobile Payments)

The chipmaker is taking advantage with the launch on Thursday of a new line of NFC components designed for automobiles. Freeman, in an interview on Wednesday, declined to say which car makes NXP was speaking with but did say he expects those chips to appear in European luxury cars starting in 2016.

NFC will not revolutionize car electronics but it could make a number of existing features better, Freeman said, adding that engineers are experimenting with potential applications.

Instead of keys, automobile rental companies could send codes to their customers NFC-enabled smartphones that would let them open the door and turn on the ignition.

NFC could also make pairing smartphones with car entertainment systems over bluetooth easier by tapping a phone on the dashboard instead of having to fiddle with controls.

"There are other ways to solve these problems. But if you now know one of largest phone makers on the planet has bought into this, as well as the whole Android ecosystem, then it's like, okay, let's take advantage because we know it's going to be ubiquitous and put it in our cars," Freeman said.

© Thomson Reuters 2014