The rumors of direct iPhone contactless payments were true. Apple has revealed Tap to Pay on iPhone, an upcoming feature that will let businesses accept payments just by bumping handsets (and the Apple Watch). Stores won't need dongles, terminals or other hardware to take your money.
The technology requires an iPhone XS or later and unsurprisingly supports Apple Pay, but it will also work with other digital wallets, third-party payment platforms and contact-free credit and debit cards. Stripe is already planning to offer Tap to Pay on iPhone to business customers, including Shopify's Point of Sale app, in the spring. Other platforms and apps are coming later in 2022, Apple said, with a future iOS beta giving developers their first chance to implement Tap to Pay.
The tech will initially be available in the US, but it will work with common payment cards from American Express, Discover, Mastercard and Visa. American Apple Stores will support Tap to Pay on iPhone later in the year.
Apple is promising the same levels of privacy and security you normally get with its tap-to-pay functionality, including encrypted transactions. The company doesn't know who's making a purchase or what you're buying.
This isn't a surprising move. Apple bought Mobeewave in 2020 with a not-so-subtle hint it would use the Canadian startup to turn iPhones into payment terminals. This also furthers Apple's ever-growing payments strategy which also includes Apple Pay, Apple Pay Cash and Apple Card. It's also a potential blow against Android — in theory, shops that embrace an iPhone-based payment system will be slightly less convenient for Android-toting customers.
It's safe to presume this will pose trouble for companies that have thrived on phone-based payment hardware, like Block's Square brand. While these firms frequently rely more on their services for income than devices, they may have to support Apple's new feature in their apps to remain competitive.