Imagine instantly paying at checkout by waving your iPhone in front of a special reader, with no signature or PIN code required.

That technology is currently available, as technology giant Apple Inc. ramps up to become a major player in the world of electronic payments. Already, Apple’s iTunes store can be used as a platform for ‘credit card’ equivalent payments.

In August 2009, Apple filed an international patent application for transfer payments from one device to another. This includes transactions between iPhones and the payWave card readers we wrote about this past March.

Apple has also hired Benjamin Vigier, famous for developing smartphone technology that Japanese commuters now use to pay for subway tickets.

If Apple introduces iPhone 5 later this year with built-in contactless credit card payment features, other smartphone developers are sure to follow.

Smartphones versus credit cards
Using either wave smartphones or credit cards, you’ll be able to move through checkout lines much faster than with traditional swipe cards.

Smartphones could replace piles of credit and debit cards, while offering a sexier and more convenient control panel interface.

On the other hand, credit cards have established consumer acceptance and have long worked with Canadian payment networks. Those same payment networks may not talk to Apple’s iTunes store, particularly if Canada’s financial community resists competition from the Apple smartphone invasion.

Also, stolen iPhones with credit card access are especially attractive to hackers, and are arguably an even more dangerous identify-theft risk than purloined plastic cards.

Smartphone credit cards in Canada
While Apple is well-established as a superb technology provider, it’s not clear whether risk-averse Canucks are ready to accept Apple — either as a bank or a credit card issuer.

Allowing Apple to offer competitive banking services in Canada will require formal parliamentary approval under Canada’s Bank Act. This can be a long, drawn-out process.

Besides, the conservative and extremely powerful Canadian banks are unlikely to allow a major player like Apple to cut into their profit margins.

The heavily regulated Canadian banking industry will only let iPhones and similar innovations replace credit cards when the banks already own a healthy share of the smartphone electronic payment industry.