Apple Will Bypass Other Hardware and Allow Payments Directly to iPhones
“Tap Your iPhone to Pay” Coming Soon to Small Businesses
Small businesses will soon be able to accept payments directly on their iPhones without the need for any extra hardware. Apple (AAPL) is reportedly planning the rollout of this feature, which will let customers pay by tapping a credit card on retailer smartphones. The company paid Canadian startup Mobeewave $100 million to develop the technology for them in 2020.
It’s similar to Apple Pay in that it is set to use the iPhone’s near-field communications, or NFC, chip. At present, merchants need payment terminals that use Bluetooth to connect to iPhones and process payments in that manner. Analysts say this feature would be especially welcomed by small businesses that don’t have a physical brick-and-mortar location.
Direct Competition: Square Could End Up Boxed Out
Analysts say Apple’s new system could impact payment providers such as Square, owned by Block (SQ). For now, Square dominates the digital payment market, and that could continue if Apple permits the technology’s use across all apps. Alternatively, it could require merchants to use Apple Pay, setting up a direct competition between Block and Apple.
Both companies’ stocks were impacted by the announcement. In early trading yesterday, Apple was up while shares of Block were down. Some reports suggest Apple’s payment processing service could become a part of Apple Pay, with sources indicating Mobeewave’s creative team has partnered with the Apple Pay division.
Big Announcements Coming for Apple, Payment Project Draws Questions
Industry observers say they have plenty of questions about what comes next for Apple’s direct payment service, such as if the tech giant plans to partner with an existing provider and when the launch could happen. Apple reportedly has new iPhone, iPad, and Mac computer announcements coming in the spring, which could coincide with the project’s official rollout.
Analysts note this continues Apple’s push into payment services, including the launch of Apple Card several years ago. Apple Cash is also available for digital peer-to-peer payments. Other tech companies have taken similar steps, with Samsung accepting tap-payments on its phones since 2019, after similarly backing Mobeewave. Ultimately, Apple’s move into the space is just part of Big Tech’s push into payments.
Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.