Apple could soon let iPhones accept contactless payments DIRECTLY without the need for any extra hardware, report claims
- Apple tipster reveals the firm’s plans to eliminate hardware for small businesses
- The feature would allow two iPhones to come together to perform a transaction
- The feature may even roll out through a software update in the coming months
Apple could let iPhones accept contactless payments directly without the need for any extra hardware ‘in the coming months’, a new report claims.
It would mean customers could tap their iPhone or debit card on the back of a retailer’s iPhone to pay at coffee shops, hairdressers, food trucks and more.
Currently, small businesses require external terminals for the customer to tap their phone or card against, such as Block Inc’s small white ‘Square’ device.
Apple’s new system will likely use iPhone’s near field communications (NFC) chip that is currently used for Apple Pay, the report said.
The feature may even roll out through a software update in the coming months, potentially accessible through Apple Pay.
Apple is working on a feature that would allow two iPhones to come together to make a transaction indepndently of any other hardware, a report says (stock image)
WHAT IS NFC?
Near field communications (NFC) chips are designed to transmit information wirelessly over short distances, usually under 4 inches (10cm).
They are similar to the radio frequency identification (RFID) products retailers use to track inventory and shipments.
It can be used for a number of functions, including sending pictures and videos between devices, and authenticating door locks.
It is also considered much more secure than Bluetooth, another wireless data standard. NFC is included in most modern smartphones.
The news comes from Apple tipster Mark Gurman writing for Bloomberg on Wednesday, citing people with knowledge of the matter.
Other recent Gurman predictions include a rugged version of the Apple Watch, an iPad with a screen the size of a car wheel, and a ‘complete redesign’ for the iPhone 14.
‘The system will likely use the iPhone’s near field communications, or NFC, chip that is currently used for Apple Pay,’ he says.
‘Devices currently require external terminals such as Square’s.’
Apple declined to comment on the new report when contacted by Reuters.
Apple has been working on the new feature since around 2020, the report said, when it paid about $100 million for Mobeewave, a Canadian startup that developed technology for smartphones to accept payments with the tap of a credit card.
In order to accept payments on an iPhone today, merchants need to use payment terminals that plug in or communicate with the phone via Bluetooth.
But the new feature would eliminate the need for these payment terminals completely, allowing two iPhones to come together to perform a transaction.
Currently, small businesses require external terminals for the customer to tap their phone or card against, such as Block Inc’s small white ‘Square’ device (pictured)
However, it is still not entirely clear if the payment acceptance option will be branded as part of Apple Pay and accessible within the Apple Pay app.
An alternate option would be Apple partnering with an existing payment network so the feature would be accessible on multiple apps.
As Gurman explains, the decision could affect market leader Block Inc – a company co-founded by Twitter founder Jack Dorsey – and its Square Reader.
‘If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware,’ Gurman said.
‘If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square.’
Apple Pay initially launched in the US in October 2014 before launching in July the following year.
The wallet can be used to make a contactless payment in a shop, on public transport, in an app or through an online store.
HOW DOES APPLE PAY WORK?
Apple Pay is the firm’s mobile payment and virtual wallet service.
It allows customers to make payments using an iPhone, Watch, iPad or Mac.
It works alongside most banks and most major credit and debit cards providers including Visa, MasterCard and American Express.
To use the services, users must link their device, security details and bank card.
To do this, open Wallet, go to settings and find Wallet and Apple Pay in there.
Apple Pay is the Apple’s mobile payment and virtual wallet service. It allows customers to make payments using an iPhone, Watch, iPad or Mac
Here, you can add credit or debit cards.
Before it is activated, the device needs to be authenticated by the bank.
Each bank has different protocols, but their security measures will have to be passed before Apple Pay is fully verified.
After your card is verified, you can tap Next and start using Apple Pay.
Apple Pay requires the Near Field Communication (NFC) antenna and Touch ID or Face ID on iPhone 6 and later to work.
Once set up, you can hold your device near a contactless terminal to authorise a payment.
For most iPhones double pressing the home button will bring up the Apple Pay function, which will use your fingerprint to confirm the transaction.
On the iPhoneX, users must press the sleep/wake button twice to invoke Apple Pay.
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