According to people who know the matter, Apple Inc. is planning to launch a new service that will allow small businesses to accept the payment on their iPhones directly without having any extra hardware.
As per Bloomberg News, Apple has been working on this new feature since 2020, when it paid $100 million to a Canadian Startup, Mobeewave. The Canada-based company has developed a technology that allows smartphones to accept payments with credit cards. The system will utilize Apple’s communications infrastructure nearby or use an NFC chip currently used for Apple Pay.
Presently, merchants use payment terminals plugged into a phone or Bluetooth to accept payments. The new feature will turn an iPhone into a payment terminal and allow a hairstylist or a food truck to take payment on their iPhone with a tap of a credit card.
The move can affect dominant market players like Block Inc.’s Square, which uses apple iPhones to facilitate payments.
The new technology by Apple will allow anyone to use its app. At the same time, Square can continue to accept payment via Apples Devices without the need for its hardware. If Apple wants merchants to use its Apple Pay or its payment processing mechanism, there will be direct competition with Square.
The representative of Block Inc. refused to comment on the development. Block’s shares fell less than 1% Thursday while Apple advanced by less than 1% in New York trading.
It is unclear if the payment acceptance mechanism will be part of Apple Pay. However, the team is working on its features has been part of the Apple payment division after it was brought over from Mobeewave. Whether Apple wants to partner with an existing payment network for its new feature or launch it independently is not clear yet.
According to some people, Apple will roll out the new feature via a software update in the coming months. The company is releasing its first beta version of iOS 15.4 shortly. A spokeswoman from Apple declined to comment. The debut of this new feature coincides with Apple’s other announcements.
Apple plans to launch an iPad Air and iPhone SE with 5G by March or April in addition to a new Mac using a custom Processor from apple as per Bloomberg News.
In recent years, Apple has been pushing its payment business by launching the Apple Card in the U.S in 2019, the Apple Device installment payment plan through credit cards later that year, and the Apple cash card that allows peer-to-peer digital payments. It is working on an Apple pay service that will enable people to buy now and pay later via installments.
Mobeewave payment technology has been used by Samsung before, and iPhone will not be the first device to use this technology.
