USB wouldn’t have worked with iPhones, so they would have needed separate hardware for android and iPhone. I’m amazed they were able to do anything with the 3.5mm port though, it seems like some clever engineering
The microphone part of the jack provides a small amount of power to serve as a microphone bias. This can be used to power a few small analog electronics as needed. The mag stripe reader may not have needed anything but a reader coil, though, and the phone can probably decode the "sound" that comes from swiping the magnetic stripe.