Apple says your iPhone will soon work as a point-of-sale (PoS) terminal

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Apple on Tuesday announced that it is expanding the iPhone’s capabilities to accept contactless payments, making it easier for merchants to complete transactions without having to purchase additional hardware.

It will also give Apple a competitive advantage in the growing world of contactless payments, in which the iPhone, along with Apple Pay, plays a dominant role in effectively transforming the iPhone into a point-of-sale terminal.

The iPhone has been used as a contactless payment method for goods and services since the launch of Apple Pay in 2014. But merchants needed their own point-of-sale hardware to accept contactless payments. Shares of payment platform company Block, formerly known as Square Inc. with its well-known iPhone dongle used to accept payments, fell more than 1% on Tuesday following Apple’s announcement.

The price of these devices ranged from $50 for a contactless payment device placed next to a cash register, to devices costing hundreds of dollars and allowing an employee or store owner to accept payments n anywhere in a store or restaurant. Cheaper devices often need to be charged and paired with an existing POS system, which can be frustrating if they fail.

Due to cost, only large retailers often have touch-enabled mobile devices. Apple’s own retail workers have used a device bolted to an iPhone to accept contactless payments at its stores, for example.

“A lot of times our contactless reader has issues or is finicky, so it would be great to offer this new way to pay as a backup and not have to buy new hardware to do it,” said Mimi Striplin, owner of The Tiny Tassel, jewelry store. in Charleston, South Carolina.

Now the iPhone will be able to act as a payment terminal itself, without any additional hardware, Apple said. The tap-to-pay feature will use the iPhone’s existing NFC chip that was used to transmit payments 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 service companies to add this functionality to their point-of-sale software.

Stripe will be the first point-of-sale company to use the iPhone as a touchscreen payment terminal through its Shopify app, Apple said.

Contactless or tap-to-pay payment systems have long been popular outside the United States as the default payment method for goods and services. But tap-to-pay has grown in popularity in the United States in recent years, especially during the pandemic, when customers and merchants wanted to avoid physical interactions with cash and cards as much as possible.

Google and Samsung have unveiled Android devices that would allow merchants to also use these devices as contactless payment terminals, but these announcements were largely aimed at outside the United States, where contactless payment habits are already well established. The new iPhone feature is aimed at the US, a much more lucrative market where contactless payments continue to grow.

The feature will only be available on iPhone 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 won’t know what merchants and customers are buying.

This story was published from a news feed with no text edits. Only the title has been changed.

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