Dive Brief:
- As more companies and consumers adopt contactless payments, Apple announced Tuesday plans to introduce Tap to Pay on iPhone. The feature will enable sellers to accept Apple Pay, contactless credit and debit cards, and other digital wallets by tapping their iPhones, according to an announcement.
- Stripe will integrate the tool for businesses first, including Shopify's Point of Sale app this Spring, and other payment platforms will adopt it later this year. The feature, which won't require additional hardware, will work on iPhone XS or subsequent devices, and will accept contactless credit and debit cards from "leading payment networks," including American Express, Discover, Mastercard and Visa.
- The company will integrate the feature into Apple's retail stores later this year, per the press release. The Tap to Pay on iPhone tool will encrypt transactions using Secure Element.
Dive Insight:
Apple noted in its announcement that 90% of U.S. retailers currently accept Apple Pay, but the introduction of this new tool signals Apple's deepening interest in payments. As Apple eyes payments to bring in additional revenue, the launch of more payment tools could be a blow to competitors like Block, formerly known as Square.
"As more and more consumers are tapping to pay with digital wallets and credit cards, 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 a statement.
Apple is just the latest payment provider to offer tap-to-pay payments. About a year ago, Mastercard teamed up with NMI and Global Payments to introduce a Cloud Tap on Phone tool, and research suggests that the payment method will continue to grow in popularity. A 2021 report from Juniper Research said that shipments of mobile point-of-sale terminals are expected to grow to 32 million by 2026. While the pandemic gave a boost to contactless payments, according to a 2021 Visa report nearly two-thirds of U.S. shoppers would like to transact via contactless payments either as much as now or more in the future.
