Washington, Feb. 8 (US): Apple said Tuesday that it is expanding the iPhone’s capabilities to accept contactless payments, making it easier for merchants to make instant payment transactions without having to purchase additional hardware.
It would also give Apple a competitive advantage in the growing world of contactless payments, where the iPhone as well as Apple Pay play a dominant role, the AP reports.
The iPhone has been used as a contactless way to pay for goods and services since the launch of Apple Pay in 2014. But it required merchants to have their own point of sale hardware to accept these payments.
Prices for these devices ranged from $50 for a contactless payment machine that sits next to a cash register, to devices that cost hundreds of dollars and allow an employee or store owner to accept payments anywhere in a store or restaurant.
Due to the cost, large retailers often only have mobiles for checkout. Apple retail employees have used a device attached to an iPhone to accept contactless payments in its stores, for example.
Apple said that the iPhone will now be able to function as a payment terminal by itself, without any additional hardware. Tap-to-pay will use the iPhone’s existing NFC chip that was used to transfer payments to the payment terminal.
It will be available to developers via an iOS software update this spring. It will be up to developers and payment service companies to add the capability to their POS software. Apple said Stripe will be the first point-of-sale company to use the iPhone as a payment terminal for payments through its Shopify app.
Outside the United States, contactless or click-to-pay payment systems have long been popular as the default way to pay for goods and services.
But “click to pay” has grown in popularity in the US in recent years, particularly during the pandemic when customers and merchants wanted to avoid as much physical interaction with cash and cards as possible.
Apple said the feature will only be available on iPhone XS or later, and won’t be available on iPads.
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