Apple Inc. on Tuesday announced a new feature for US merchants that allows them to pay by holding their phones close to each other simply by using apple pay and a partner-enabled iOS app.
Tap to Pay, which is expected to come out later this year, will let businesses process transactions in stores by tapping their iPhone on the customer’s iPhone or Apple Watch, the tech giant said in a statement.
Apple said the feature will accept contactless credit and debit cards, as well as Apple Pay, Visa, American Express, Mastercard, and Discover. It added that no extra hardware or payment terminal would be needed.
“Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone,” Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet, said in the statement.
The tap-to-pay feature will use the iPhone’s existing NFC chip that was being used to transmit payments down to a payment terminal. It will be available to developers via an iOS software update this spring. It will be up to developers and payment-services companies to add the capability to their point-of-sale software.
Stripe will be the first payment platform to offer Tap to Pay on iPhone to their business customers, including the Shopify Point of Sale app this spring. Additional payment platforms and apps will follow later this year.
“In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business.”
It will also give Apple a competitive edge in the growing world of contactless payments, in which the iPhone, as well as Apple Pay, play a dominant role by effectively turning the iPhone into a point-of-sale terminal.
The iPhone has been used as a contactless way to pay for goods and services since Apple Pay launched in 2014. But it required merchants to have their own point-of-sale hardware in order to accept contactless payments.
Google and Samsung have unveiled Android devices that would allow merchants to use those devices as contactless payment terminals as well, but those announcements have been largely aimed at outside the U.S., where contactless payment habits are already well established. The new iPhone feature is aimed at the U.S., a much more lucrative market where contactless payments are still growing.
The feature will only be available on iPhones XS or later, Apple said, and will not be available on iPads. Just like with Apple Pay, the company said it will keep transaction data private and will not know what merchants and customers are buying.