The iPhone 5 is likely to have the feature of Near Field Communications (NFC), according to the latest report.

A Fast Company interview from last week tried to confirm if Apple was one of Mastercard's future NFC partners. MasterCard's head of emerging markets Ed McLaughlin did not confirm it but stated, “Any handset maker out there. Now, when we have discussions with our partners, and they ask us not to disclose them, we don't.”

NFC is short-range wireless communication technology that is used in mobile phones for a variety of applications including mobile payments.

Apple has already made a small stride towards convincing users to use their iOS devices and iTunes account for payments. It has introduced a self-checkout system to their Apple Store app that allows customers to purchase items at Apple retail stores using their iTunes account.

NFC would further streamline the process and potentially expand it to many other retailers.

Many Android handsets are compatible with the solution, and Google offers Google Wallet to drive the payment system. However, no one is using it. As of now it looks like Apple will also mount a challenge to Google Wallet with its own iWallet NFC payment system.