SAN FRANCISCO: Apple announced a new service that will allow US businesses to accept payments on their iPhones from touchless cards or other iPhones, a new challenger in the booming payments business.
The iPhone-maker said no additional hardware or payment terminal will be required. The system will work by tapping buyer’s and seller’s devices and thus bypassing payment terminals to use their iPhone to seamlessly accept Apple Pay, contactless credit and debit cards, and other digital wallets through a simple tap to their iPhone.
“The new capability will empower millions of merchants across the US, from small businesses to large retailers, to use their iPhone” to accept payments, Apple said in a statement.
Payments platform Stripe will in the spring be the first to offer the “tap to pay” system to their business customers, Apple noted, with others expected to 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 vice president of Apple Pay and Apple Wallet.
The system is Apple’s latest push into financial services, including its Apple Pay payment feature, and offers competition to Block’s smartphone hardware that allows merchants to swipe customers’ cards.
As part of “tap to pay,” customers in the United States would also be able to use credit and debit cards such as Visa and Mastercard as long as they have the contactless function.
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, contactless credit or debit card, or other digital wallet near the merchant’s iPhone and the payment will be securely completed.
Apple is not the first to turn its flagship smartphone into a payment terminal without requiring additional equipment. South Korea’s Samsung launched a similar offer in October 2019.
