Apple Turns iPhone Into Mobile Payments Terminal

Apple has entered the mobile payments terminal market with a contactless payment system it is calling Tap to Pay on the Apple iPhone.

The tech giant announced that US merchants and shops will be able to accept Apple Pay and other contactless payments simply by using iPhone and a partner-enabled iOS app later this year.

This development will no doubt worry competitors already operating in this market. Apple’s solution does not require any additional hardware (except for an iPhone) unlike rival solutions, such as Jack Dorsey’s digital payment specialist Square, which in December was renamed to Block.

Tap to Pay

According to Apple, its plans to introduce Tap to Pay on iPhone “will empower millions of merchants across the US, from small businesses to large retailers, to use their iPhone to seamlessly and securely accept Apple Pay, contactless credit and debit cards, and other digital wallets through a simple tap to their iPhone – no additional hardware or payment terminal needed.”

Apple said Tap to Pay on iPhone will be available for payment platforms and app developers to integrate into their iOS apps and offer as a payment option to their business customers.

Stripe will be the first payment platform to offer Tap to Pay on iPhone to their business customers, and additional payment platforms and apps will follow later this year.

“As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone,” said Jennifer Bailey, Apple’s VP of Apple Pay and Apple Wallet.

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“In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes – from solopreneurs to large retailers – to seamlessly accept contactless payments and continue to grow their business,” said Bailey.

No additional hardware

The way it will work is that once Tap to Pay on iPhone becomes available, merchants will be able to unlock contactless payment acceptance through a supporting iOS app on an iPhone XS or later device.

At checkout, the merchant will simply prompt the customer to hold their iPhone or Apple Watch to pay with Apple Pay, their contactless credit or debit card, or other digital wallet near the merchant’s iPhone, and the payment will be securely completed using NFC technology.

Apple pointed out that Apple Pay is already accepted at more than 90 percent of US retailers, and with this new capability, virtually every business, big or small, will be able allow their customers to Tap to Pay on iPhone at checkout.

Apple said that Tap to Pay on iPhone will also roll out to Apple Store locations in the US later this year.

The tech giant also said it will work closely with leading payment platforms and app developers to offer Tap to Pay on iPhone to millions of merchants in the US. It seeking to make Tap to Pay on iPhone work with contactless credit and debit cards from the likes of American Express, Discover, Mastercard, and Visa.

The software developer kits (SDKs) for Tap to Pay on iPhone will be available to developers in an upcoming iOS software beta.