Apple to turn iPhones into payment terminals

Apple is planning to introduce a new service that will let small businesses accept contactless payments directly via iPhone without the need for any extra hardware or apps, according to Bloomberg News.

The move – which is expected to roll out in ‘the coming months’ – will essentially turn the iPhone into a payment terminal. This would allow customers to pay for services or products simply by tapping their iPhone or debit card on the back of a retailer’s iPhone.

The new service will particularly benefit SMEs and mobile businesses such as independent retailers, mobile hairdressers and other on-the-move services.

Currently, small businesses have to employ external payment terminals in order accept payments on an iPhone – such as Block Inc’s small white ‘Square’ device – which the customer taps their phone or card against in order to pay.

The tech giant has been developing the new feature since it paid $100 million for Canadian start-up Mobeewave, back in 2020. Mobeewave specialised in developing technology for smartphones to accept payments with the tap of a credit card.

The new payment system is expected to use the iPhone’s near field communications (NFC) chip which currently powers Apple Pay, although it is unclear whether it will be branded separately.

If Apple’s latest move does require merchants to use Apple Pay to accept payments then it is likely to impact iPhone payments providers such as Block Inc.’s Square, which currently dominates the market.

“The timing of this news is key and underlines the anticipated growth of alternative payments,” commented CEO of MultiPay Global Solutions, David Maisey.

“If Apple does enter the market, then it will be more good news for merchants and retailers as it gives them more choice and control of the payment systems they use. A solution running on an Apple device will also likely be quite low cost – at least initially – as there will be no upfront expense for hardware.

Maisey also believes the new plans could also help with the ongoing challenge of changing consumer behaviours, which is “never a quick or easy process”.

“Apple entering this space could speed up a change in appetite for alternative payments and help create more opportunities for all the exciting alternative payment solutions that are set to launch this year.”

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