Apple to let retailers use an iPhone to accept contactless payments
Apple is turning iPhones into mobile POS devices — with no additional hardware required.
The tech giant plans to introduce a mobile payment feature, called “Tap to Pay on iPhone,” that will enable retailers of all sizes to use an iPhone to accept Apple Pay, contactless credit and debit cards, and other digital wallets through a tap to their iPhone, with no additional hardware or payment terminal needed. The new capability essentially turn iPhones directly into mobile POS devices.
The tap-to-pay feature 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 the capability to its business customers, including the Shopify POS app, this spring.
Additional payment platforms and apps will follow later this year. While it is very possible Apple will work with the Square mobile payment platform, Tap to Pay is poised to directly compete with its Square Register solution. Tap to Pay on iPhone will also roll out to Apple Store locations in the US later this year.
Once Tap to Pay on iPhone becomes available, retailers will be able to unlock contactless payment acceptance through a supporting iOS app on an iPhone XS or later device. At checkout, the retailer will prompt the customer to hold their iPhone or Apple Watch to pay with Apple Pay, their contactless credit or debit card, or other digital wallets near the retailer’s iPhone, and the payment will be securely completed using NFC technology. No additional hardware will be needed to accept contactless payments through Tap to Pay on iPhone, so retailers can accept payments from any location.
Customers’ payment data is protected by the same technology that makes Apple Pay private and secure. All transactions made using Tap to Pay on iPhone are encrypted and processed using the Secure Element (an industry-standard, certified chip running the Java Card platform), and as with Apple Pay, Apple doesn’t know what is being purchased or who is buying it.
[Read more: Apple unveils mobile payments platform, Apple Pay]
In 2019, Apple launched its alternative to traditional credit cards — the no-fee Apple Card. The Apple Card is built into the Apple Wallet app on iPhone, connecting it to the Apple Pay digital payment service and providing users the ability to manage their card on their phone
In July 2021, media reports indicated the tech giant was getting set to launch a buy now, pay later (BNPL) solution connected to its Apple Pay digital payment service. Apple also offers a peer-to-peer payment solution known as Apple Pay Cash.
Apple says it will work closely with leading payment platforms and app developers across the payments and commerce industry to offer Tap to Pay on iPhone to millions of merchants in the U.S. Tap to Pay on iPhone will work with contactless credit and debit cards from payment networks including American Express, Discover, Mastercard, and Visa.
“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, in a corporate blog post. “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.”
Tap to Pay on iPhone will be available to participating payment platforms and their app developer partners to leverage in their software developer kits (SDKs) in an upcoming iOS software beta.