The real news is Apple specifically took a non competitive stance — making the API available to third parties like Stripe - rather than building in house, leveraging Apple Card connections, or similar
So in those markets you will still need supporting hardware for the times you can’t accept contactless or risk losing the sale.
My bank allows for location based security. If my phone is not near the location the card is being used I then have to use chip and pin instead of contactless (dead battery, poor cell service, unable to get a decent location fix because of the building, all these can trigger the need to revalidate).
And a lot of people still don’t have banking apps on their phone (one of the reasons banks had to support SMS 2FA when implementing Strong Customer Authentication).
I’m not too sure if the banks/ Visa/MC would be too happy allowing users to enter their pins on the retailers phone as pin pads are supposed to be encrypted.
We are seeing cards come with biometrics and pin pads on them, these cards will help with “card terminal less” transactions, but both bans will have to start issuing them and card users will have to be happy using them (I still know quite a few people who refuse to use contactless at all).
So imo those BlueTooth card terminals will be with us for a while to come, they will just be used less, which is why imo Apple worked with partners who already have such terminals as a fall back for whenever contactless can’t be used.
So this allows for an iPhone/iPad/Android phone/tablet to implement EMV contact/contactless payments (obviously contact would require a physical card reader). Contactless payments above floor limits (eg in Australia $100) can require a PIN that would be entered through the tablet.
If it's iphones have reached saturation with small business owners, let's build a business on top of that already dug and locked in moat, then perhaps.
If it's offering this feature is a driver for more small business owners buying and sticking with iphones and the accompanying ecosystem, you can see how it's perhaps the smarter play to be an open platform here.
And for those even on Square Apple's ipads are still the preferred choice as far as I can tell. So there isn't much of a benefit other than fees.
For anything larger than a small fast casual you quickly run into greater integration needs with things like KDS (of which a few do use tablets, Toast, Fresh, etc, and even then I think ipads are preferred. I know Square integrates with a few of those as well as NorthStar so, I don't think they may have much to fear other than at the low end mom and pop stores.
If I go to the farmers market on the weekend, they all accept cash or tap-to-pay with a Square tap-only reader, and that’s it.
It looks like they are going through similar weird things with instant bank transfers. In Australia all the major banks just have instant transfers built in. I use the bank app to transfer to friends and they get notified. In the US you Venmo or PayPal or whatever.
The first time I was able to use ApplePay (as an American) was on a trip to NZ. In fact, the clerk at the gas station was shocked to see someone pay with their phone, even though this had been possible with Android for some time, and even though contactless itself was old hat there.
As for the SIM thing, that just depends so much on the business model and regulatory environment. Pay as you go is relatively unpopular in the US, and the availability reflects that. But it's not like Italy, where I had to hand over my passport (!) to get a SIM, or Germany, where I had to document where I was "living". I've heard it's even worse in, say, Chile, where you virtually need to be a citizen or permanent resident to get a SIM.
BUT contact free payment via card and Apple Pay contact free payments are slightly different and I’ve been to POS terminals that had one but not other. But the point was that there exists cards that don’t have nfc capabilities, including the one made by the company at center of article.
They are very, very similar that this surprises me. Apple/Google pay implement the same standards as wireless cards and it should Just Work(TM) everywhere the cards can be accepted. Obviously real life and 'should' don't always marry up.
But it was one of the big drivers of acceptance of the tech in most places - the infrastructure is already there! You probably don't even need to update the firmware on your reader!
> including the one made by the company at center of article.
Sure, but my point is that I believe that's deliberate, because they want you to use the contactless payment capability of your phone. I don't doubt there are other cards out there without the capability, I just think the apple one isn't a great example.
The US may be an anomaly here, but it always has been. The UK had chip and pin roll out while the US still had mag stripe being the most common; we slowly added chip and signature (we still don't have chip and pin), and now we still aren't anywhere close to universal in tap to pay.
In the USA maybe. Elsewhere it's already huge.
If the person who is ringing me up has an iPhone, and says "just tap this", there is a part of me that is wondering if this is the company's iPhone, or their personal device? Of course, this is easily resolved with the right surround which would remove this question, but I think it's somewhat valid.
Isn't this how it works in Apple stores (I'm not an apple person). Don't they walk around with iPhones in this big chunky yellow cases, and then you just pay for stuff through that? Maybe I'm wrong...
I don't see why you care anyway, they would be stealing from the store, not from you. You would already have whatever item you are buying.
Is the iPhone gonna print a receipt?
The merchant rings you up for $5, shows you the phone in their hand indicating the cost, and the Square Reader lights up to show it's ready for payment. You pay via inserting your credit card, which processes in a few seconds, and then the payment is complete. The merchant is no longer showing you the phone, and presumably hits "No Receipt".
However, the merchant actually has a second out of sight device that is set to charge $500 and is actually paired with the Square Reader. Because you've paid with a physical card, there's a good chance you won't notice the charge till you go to pay your credit card or check your bank account.
This would probably be a short-lived scam, as the merchant's malicious Square account would have to be linked to a bank (I think this is the only option), which would identify them. I'm pretty sure Square requires ID verification of some sort as well. So reporting this malicious transaction to your bank/credit card would flag them.
Additionally, if you're paying via a mobile wallet, you'll likely get an immediate notification saying "You paid $500 to Malicious Ice Cream Vendor".
Now let's think about Apple's new plan. It could be that Apple layer's it's own mandatory interface that shows "Pay $5 to Ice Cream Vendor" regardless of the app being used. Maybe this is actually the employee's phone instead of the company's device, but that's the same as the employee stealing cash out of the register, so not really your issue.
Or Apple could not layer it's own UI, and just open up the radio as an API. Apple could require that apps that use this API to have some additional verification to prevent someone from making an app that displays "Charge $5" when it's really charging $500.
All that being said, I only see smaller merchants using iPhones + Square Readers. Maybe some boutique stores, food trucks, etc. Once a store gets large enough, they usually want dedicated hardware, even if it's a Square Stand.
---
Here's Square's hardware page if you want visuals: https://squareup.com/au/en/hardware
Useful for double checking that something hasn’t gone wrong and I haven’t been charged the wrong amount! I’d also see if a fraudulent transaction went through.
The first time I used one of those strange little white terminals it seemed a bit dodgy ... but you pretty quickly come to trust that what's on the screen is what gets debited.
Also I doubt Apple would leave a nice app-accessible text field on the Tap To Pay dialog where I can insert my fake amount. Right ?!
I would like to go to a store where I trust the business, the employee, and the entire pipeline. I understand that is idealistic, but yes, this is how I feel. It's like saying "why do you care if the employee is underpaid, you're saving money", which describes the whole tipping culture in the US.
Why would you need a special surround? And why is that an issue for you the consumer?
I would be very surprised if Apple tried to enter the credit card processing industry. It isn't the sort of thing they're positioned to do well.
No.
It allows sole proprietors, freelancers and the like to not have to get a Square reader to take credit card transactions. That's super convenient, especially for getting a deposit from a client, for example.
It also requires a newish iPhone (iPhone XS or later device), so there will still be plenty of iPhones out there that won't support this.
We saw how it took 10+ years and a dominating market position for Apple to show their claws with controlling 3rd parties with the App Store. Make no doubt that once a significant portion of the market uses Apple hardware or services for transactions, that they will want control and a cut of the transaction.
Notice how they say: partner-enabled iOS app
This means Apple has to endorse each 3rd party, and they remain under Apple's control just like app developers.
Really? I thought Apple's position was fairly consistent and it took 10+ years for the companies using the App Store to get antsy.
The smaller fish got consistently screwed and no one was happy per se, but the sheer stupidity of Apple's recent actions do not help matters. For example, the app store cut is 30% unless you beg for scraps as a small business at which point you can get 15% until you start making $1 million. Income cliffs aren't how real taxes work (let's be clear here: Apple is pretending to be the government with taxes and fees and shadow court system of app review), they're just how Reagan demonized them back in the day.
Apple isn't Microsoft. When was the last time Apple created something consumer facing from scratch instead of using industry standards or market leaders if they exist? They generally don't explicitly compete with commodity businesses unless there's something unique they're attempting to accomplish. They do stuff just because they can.
They partnered with the banks to create Apple Pay.
They partnered with Goldman Sachs and MasterCard to create the Apple credit card.
Besides, it would be a huge undertaking to build out a payment platform like Square to compete with them. Of course they could have bought any number of payment processors if they wanted to if they wanted to go that route.
Stripe and Shopify already have millions of customers so it only makes sense to partner with them.
The obvious thing most people on this thread is this being the basis for Apple's cryptocurrency aspirations.
Tim Cook owns some and he said Apple as a company is looking into cryptocurrency [1]. It only makes sense that Apple will eventually support bitcoin and other transactions natively on the iPhone, peer to peer.
[1]: "Tim Cook said Apple is looking at cryptocurrency – Here’s what the company is likely to do" https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-i...
The M1 is also customer facing, vs partnering with Intel to make it
IIRC, Apple wanted Intel to fab their silicon, but Intel refused. It’s only since Gelsiner took over that Intel is open to fabbing other designs.
I'm too lazy to recall every detail, but it happened, often. Last exemple I have in mind is maps. As far as tech is concerned, I believe metal is their own inhouse invention?
Uh huh.
Last exemple I have in mind is maps.
They're working with several providers, including Yelp, Open Maps and Garmin. I've submitted corrections and additions to Apple Maps; anyone can do it.
As far as tech is concerned, I believe metal is their own inhouse invention?
Metal is a set of APIs for developers; it's not customer facing. Most users aren't going to know which graphics API their software uses. Apple supported and uses OpenGL for a long time and it's still available for backwards compatibility I believe.
Running "software POS" on Android does not require any special "partnerships" with Google, as access to NFC is open.