According to Bloomberg’s Apple-whisperer Mark Gurman, these direct payments will also allow people to take contactless payments from regular credit cards, too, just by tapping or waving them near an iPhone. Imagine shopping at a flea market and being able to pay by card. In theory, anyone with an iPhone might accept credit card payments, from food trucks to homeless magazine vendors. But unlike the now almost-universal Apple Pay, this new scheme already has some competition. “Apple Pay isn’t the only game in town,” Japan-based attorney Matthew Carter told Lifewire via email. “In Japan, there are NFC options, too, but apps like PayPay, which offer scannable codes, are also very popular.”
The Next Apple Pay
Apple Pay revolutionized phone payments. It wasn’t the first phone payment option, but it was the first to go fully mainstream. It’s also both safer and more private than using your actual card, thanks to biometrics authentication and keeping your actual card number secret. Even if your iPhone is stolen, the thief still needs your phone’s passcode to make a payment. Now, Apple may bring the same ease of use to receiving payments. There are no details of this unannounced service, but one can imagine it would work with Apple Cash. Currently available only in the US, Apple Cash lets people make payments directly to each other using the Messages app. It’s not a stretch to assume the card payments could go straight to your Apple Cash balance, to be used for further payments, or transferred out to a bank account. Then there’s Apple’s purchase of payments startup Mobeewave in 2020, a service that lets buyers pay by tapping their cards onto the NFC chip of a smartphone. As part of the acquisition, Apple hired the whole Mobeewave team, which certainly makes it seem like it’s planning to add such a feature to iPhone.
Square Killer?
One of the most popular ways for individuals and small businesses to take credit cards is to use Square, which provides a card-reading dongle as part of the service. Apple’s payments system wouldn’t necessarily compete with this. “Block’s Square section supplies software to run a virtual register—keeping everything from menu items to prices to inventory, accounting for sales tax and gratuities, and issuing a receipt—as well as different services like banking, payroll, loans, and invoices. Micro-merchants account for only a third of Block’s gross payment volume,” Sergey Nikonenko, COO at mobile development company Purrweb, told Lifewire via email. That doesn’t sound like a typical Apple model. More likely is it’s a simple offer for small businesses and individuals. And in fact, Apple’s presence in this market might even help the likes of Square. “The service might benefit [Square’s parent company] Block and other payment providers such as PayPal by allowing smaller retailers to accept payments more simply without the need for a separate piece of hardware,” says Nikonenko. That assumes that Apple would provide a way for other vendors to use the iPhone’s NFC chip to receive payments, which is far from a given. We already know Apple loves to take a cut of any payments that are even tangentially related to its App Store, so perhaps Square and PayPal will prefer to keep their own dongles to avoid another possible Apple tax. But, of course, that requires a lot more work from a user to get set up. If Apple makes its Mobeewave-based service available to anyone and makes setup as easy as setting up Apple Pay, it will significantly lower the barrier to accepting card payments. And that could really shake up the rest of the industry. However this shakes out on launch, the biggest short-term winners will be you and me, the people who didn’t bring enough cash to buy a slice of street pizza. Contactless payments with phones, cards, or watches are already huge in places like the U.K. and Sweden. It’s a small hop from there to eliminating cash altogether, at least in general everyday use. This could be a pretty big deal.
