Apple has announced plans to turn iPhones into payment terminals to allow small businesses to accept payments directly through their devices. The new service, as reported by Bloomberg, was developed by a Canadian startup called Mobeewave which Apple Inc. bought for around $100 million in 2020.
New smartphone technology will allow them to accept payments at the touch of a credit card using the near field communication (NFC) chip in the iPhone. The NFC chip is currently used for Apple Pay which allows users to make payments with their devices through supported terminals.
iPhone users could soon accept credit card payments
Currently, payments made through an iPhone require the merchant to have Bluetooth or a plug-in installed on their payment terminal. The new technology will allow an iPhone itself to function as a payment terminal. This means that small businesses like food trucks, cafes and hair salons can allow customers to pay simply by tapping their credit card on the merchant’s iPhone.
Integrated with Apple Pay, payment will also be able to be redeemed by simply touching the customer’s iPhone with the merchant’s own device.
Apple’s plan impacts the payment terminal market
The move could disrupt the payment terminal market, with devices currently requiring external terminals such as Square to process a payment. The news has already had an impact on the stock market, with the Bloomberg report telltale shares of Square’s parent company Block Inc. have already fallen 3.4% while those of Apple have risen 2.1%.
Payment providers such as Square, which rely on Apple iPhones to facilitate sales, may also be affected in other ways. There won’t be a major change if Apple decides to allow any app to use the new technology. However, chances are they will force merchants to only use Apple Pay or another proprietary payment processing system. If Apple goes in that direction, then the likes of Square will have to provide their own hardware to compete.
A new payment terminal technology will soon be launched
It is understood that Apple could start rolling out the new payment terminal technology in the coming months. They will do so via a software update, possibly around the same time or shortly after the release of the first iOS 15.4 beta.
Apple will also soon launch the iPhone SE and iPad Air with 5G, as well as a new Mac running an Apple custom processor.