Apple Inc (AAPL.O) is initiating a new iPhone feature that will benefit consumers and businesses alike. In its latest push into the financial technology (fintech) industry, Apple’s new feature will allow businesses to accept credit card and digital payments from their iPhones. This upheaval attempts to bypass hardware systems such as Block Inc’s Square terminals.
Currently, merchants need to use payment terminals that communicate with the phone via Bluetooth. Apple’s upcoming feature will instead turn iPhones into a payment terminal.
Apple is launching the new feature later this year, using near field communications (NFC) technology to enable payments between iPhones. “Apple’s venture into contactless payments is an indication of how important payments are as a business for the company,” Cross Research analyst Shannon Cross says.
The company has been working on this feature from 2020, paying $100 million to a Canadian startup called Mobeewave to develop the technology for smartphones to accept payments with the tap of a credit card.
Apple’s fintech push will disrupt payment providers that currently rely on Apple’s iPhones to facilitate sales, such as Square terminals. If Apple requires merchants to use Apple Pay or its own processing system, this denotes a direct rivalry between Apple and Square.
The company expects to roll out the first beta version of this feature with the upcoming iOS 15.4, and is likely to see the final release of the feature for consumers later down the track.
The iPhone will not be the first device to have Mobeewave’s payment acceptance technology. Prior to Mobeewave’s resale, Samsung implemented the credit card acceptance feature on its devices in 2019.
