Apple is planning a new service that will let small businesses accept payments directly on their iPhones without any extra hardware, according to people with knowledge of the matter.
The company has been working on the new feature since around 2020, when it paid about $100 million (€90 million) for a Canadian startup called Mobeewave that developed technology for smartphones to accept payments with the tap of a credit card. The system will likely use the iPhone's near field communications, or NFC, chip that is currently used for Apple Pay.
In order to accept payments on an iPhone today, merchants need to use payment terminals that plug in or communicate with the phone via Bluetooth. The upcoming feature will instead turn the iPhone into a payment terminal, letting users such as food trucks and hair stylists accept payments with the tap of a credit card or another iPhone onto the back of their device.
The move could hit payments providers that rely on Apple's iPhones to facilitate sales, such as Block's Square, which dominates the market. If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware. If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square. A Block representative didn't immediately respond to a request for comment.
Shares of Block fell 3.4 per cent as the market opened in New York on Thursday; Apple advanced 2.1 per cent.
It’s unclear whether the payment acceptance option will be branded as part of Apple Pay, though the team working on the feature has been working within Apple’s payments division since being brought over from Mobeewave, the people said. It’s also not known if Apple intends to partner with an existing payment network for the feature or launch it alone. Apple may begin rolling out the feature via a software update in the coming months, the people said. The company is expected to release the first beta version of iOS 15.4 in the near future, which is likely to see a final release for consumers as early as the spring. An Apple spokeswoman declined to comment. – Bloomberg