Apple working on tech to allow iPhones to directly process credit cards

Posted:
in iPhone
Small businesses may soon be able to accept credit and debit card payments directly through the iPhone's onboard NFC chip without the need for external hardware.




In August 2020, it was reported that Apple purchased Mobeewave, a payments technology startup that developed a method allowing smartphones to be used as mobile payments terminals.

Now it appears that the Cupertino-based tech giant has plans for the technology -- allowing small businesses to accept payments directly on their iPhones without any extra hardware, according to Bloomberg.

The move would eliminate the need for third-party hardware, such as Block Inc.'s Square payment systems, which currently dominate the market.

Instead, small business owners would be able to tap any tap-to-pay credit or debit card onto their iPhone, allowing customers to pay them directly. This system would rely on the iPhone's near-field communications (NFC) chip and work similarly to tap-to-pay terminals at gas stations and retail locations.

As Bloomberg points out, its not clear whether or not the NFC payment option would be branded as part of Apple Pay, or as an entirely separate service.

Apple has a number of projects involving payment options. For example, Apple Pay, launched in 2013, gives customers the ability to tap their iPhone to pay at any point-of-service that accepts NFC payments.

Additionally, in 2019, Apple introduced its own credit card, the Apple Card, launched in partnership with Goldman Sachs.


Read on AppleInsider
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Comments

  • Reply 1 of 28
    Seems like a potentially revolutionary feature that ought to have been available a few years ago when NFC matured
    williamlondon
  • Reply 2 of 28
    rob53rob53 Posts: 2,955member
    Nice idea as long as Apple is ready to provide customized POS software. We have both Square and Toast POS systems in town with one business using Toast to handle everything in their business, e.g., ordering, payment, employee hours, food ordering (restaurant). Providing only the payment capability won’t convert these businesses. Didn’t see how Apple Pay from phone to phone would work. 
  • Reply 3 of 28
    dk49dk49 Posts: 210member
    Samsung phones already have this feature I believe. 
  • Reply 4 of 28
    avon b7avon b7 Posts: 6,256member
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 


    muthuk_vanalingam
  • Reply 5 of 28
    XedXed Posts: 1,449member
    avon b7 said:
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 
    I will give you that… when I think of Huawei and Android I do think of POS.
    williamlondonStrangeDaysjony0
  • Reply 6 of 28
    crowleycrowley Posts: 10,159member
    Interesting.  Presumably there would be fees, but there would be reductions/bonuses on one or both sides if a customer uses Apple Pay, Apple Pay Cash or Apple Card to pay a vender using the Apple [insert branding here].

    Does the iPad have the NFC capability?  I see lots of stores using the iPad as the cashier terminal; if it could also deliver the payment processing in a single unit then.  The cellular connection of the iPhone isn't needed is it?  Could also be a case for an updated iPod touch.
  • Reply 7 of 28
    IreneWIreneW Posts: 297member
    avon b7 said:
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 


    I believe Apple still restricts access to the NFC, making it impossible to implement solutions similar to those available on Android.
    edited January 27 williamlondon
  • Reply 8 of 28
    avon b7avon b7 Posts: 6,256member
    IreneW said:
    avon b7 said:
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 


    I believe Apple still restricts access to the NFC, making it impossible to implement solutions similar to those available on Android.
    Good point. I'd forgotten that aspect. 

    Any solution would need a dongle or a 'card not present' payment manager (less secure, longer processing time and more expensive for the vendor etc). 
    edited January 27
  • Reply 9 of 28
    Cesar Battistini MazieroCesar Battistini Maziero Posts: 254unconfirmed, member
    Apple should just buy square, gather their knowledge from their partner SAP, and solve small businesses lives. 

    They have the power to do it!

    Because let me tell you, POS software is BAD. 
  • Reply 10 of 28
    dk49dk49 Posts: 210member
    avon b7 said:
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 


    Samsung's solution is different. It has a tiny coil that shoots out the same magnetic code that those readers normally get from your credit card. So it basically acts as your credit card and can be used wirelessly with all credit card readers. That's huge. 

    Plus if Apple brings a similar solution, I wonder what happens to the Apple pay readers which so many retailers have invested in. 
  • Reply 11 of 28
    jimh2jimh2 Posts: 410member
    crowley said:
    Interesting.  Presumably there would be fees, but there would be reductions/bonuses on one or both sides if a customer uses Apple Pay, Apple Pay Cash or Apple Card to pay a vender using the Apple [insert branding here].

    Does the iPad have the NFC capability?  I see lots of stores using the iPad as the cashier terminal; if it could also deliver the payment processing in a single unit then.  The cellular connection of the iPhone isn't needed is it?  Could also be a case for an updated iPod touch.
    There will be fees as that is how credit cards work. The recipient always pays. I doubt individuals will be able to accept CC’s. There is far too much paperwork required due to money laundering and fraud concerns. I’d expect to pay at least 2.75% skim which is around what Square, PayPal and others charge. A lot of people do not realize that card perks come out of the merchants pockets. CC companies are not giving anything away. 
  • Reply 12 of 28
    mike1mike1 Posts: 2,985member
    rob53 said:
    Nice idea as long as Apple is ready to provide customized POS software. We have both Square and Toast POS systems in town with one business using Toast to handle everything in their business, e.g., ordering, payment, employee hours, food ordering (restaurant). Providing only the payment capability won’t convert these businesses. Didn’t see how Apple Pay from phone to phone would work. 

    Why would it need to address every possible use case out of the gate? Simply processing credit cards easily and inexpensively would be welcome by many small businesses that accept credit cards and do not need it to run their entire business. I've never seen Toast outside of a restaurant/bar setting and that is only a fraction of the market.
  • Reply 13 of 28
    crowleycrowley Posts: 10,159member
    jimh2 said:
    crowley said:
    Interesting.  Presumably there would be fees, but there would be reductions/bonuses on one or both sides if a customer uses Apple Pay, Apple Pay Cash or Apple Card to pay a vender using the Apple [insert branding here].

    Does the iPad have the NFC capability?  I see lots of stores using the iPad as the cashier terminal; if it could also deliver the payment processing in a single unit then.  The cellular connection of the iPhone isn't needed is it?  Could also be a case for an updated iPod touch.
    There will be fees as that is how credit cards work. The recipient always pays. I doubt individuals will be able to accept CC’s. There is far too much paperwork required due to money laundering and fraud concerns. I’d expect to pay at least 2.75% skim which is around what Square, PayPal and others charge. A lot of people do not realize that card perks come out of the merchants pockets. CC companies are not giving anything away. 
    I don't think anyone was suggesting they do?
  • Reply 14 of 28
    GeorgeBMacGeorgeBMac Posts: 11,421member
    This would be great!   I shudder every time somebody shoves my card into one of those Square devices.  It feels worse than scanning one at a gas station (which I no longer do -- Sheetz offers Apple Pay at the pump).

    So yes, this would add convenience.
    But more importantly (at least to me!) would be added security.   Since it is an Apple product I assume it would carry the same level of privacy and security that Apple Pay carries -- which is the most private and secure in all of the the finance industry.   You just can't get any more private or secure.

    But, in a way, Apple already provides a lot of the functionality of this with Apple Cash.  If you want to pay for something, simply send them a text with Apple Cash.   Nothing could be more simple -- including tapping a card.  My grandson and his friends tend to use it far more than the old paper stuff.

    And that raises another question:  How does this impact the push towards CBDC (Central Bank Digital Currency).   China is already using it and America's Fed is giving it a serious look.   But one of if not THE biggest advantage is peer to peer payment processing.  Apple and America's banking system keep racing ahead and placing a high bar for a CBDC.
  • Reply 15 of 28
    First of all this sounds illegal and Apple should learn a bit about financial regulations on processing cards. They cannot be issuer and processor at the same time. I have spent several months in one of two biggest US credit card processor companies and learned a bit about that. I suggest legal department at Apple studies PCI regulations before it gets hit with federal lawsuit for violating industry compliance standards.
    williamlondon
  • Reply 16 of 28
    jimh2 said:
    crowley said:
    Interesting.  Presumably there would be fees, but there would be reductions/bonuses on one or both sides if a customer uses Apple Pay, Apple Pay Cash or Apple Card to pay a vender using the Apple [insert branding here].

    Does the iPad have the NFC capability?  I see lots of stores using the iPad as the cashier terminal; if it could also deliver the payment processing in a single unit then.  The cellular connection of the iPhone isn't needed is it?  Could also be a case for an updated iPod touch.
    There will be fees as that is how credit cards work. The recipient always pays. I doubt individuals will be able to accept CC’s. There is far too much paperwork required due to money laundering and fraud concerns. I’d expect to pay at least 2.75% skim which is around what Square, PayPal and others charge. A lot of people do not realize that card perks come out of the merchants pockets. CC companies are not giving anything away. 
    A lot of people people do not realize that credit card fees come out of the customers pockets. Even when you’re paying cash, as most merchants mark up EVERYTHING to offset those fees.
    tokyojimu
  • Reply 17 of 28
    IreneWIreneW Posts: 297member
    dk49 said:
    avon b7 said:
    dk49 said:
    Samsung phones already have this feature I believe. 
    And Huawei has had this for a few years too. 

    There are so called soft-POS solutions for Android which turn your NFC equipped phone into a POS unit and I would think there are similar third party solutions for Apple too but having the phone manufacturer offer the functionality should make the experience more seamless. 


    Samsung's solution is different. It has a tiny coil that shoots out the same magnetic code that those readers normally get from your credit card. So it basically acts as your credit card and can be used wirelessly with all credit card readers. That's huge. 

    Plus if Apple brings a similar solution, I wonder what happens to the Apple pay readers which so many retailers have invested in. 
    I think you got the use case backwards. Read the article again.
    williamlondon
  • Reply 18 of 28
    First of all this sounds illegal and Apple should learn a bit about financial regulations on processing cards. They cannot be issuer and processor at the same time. I have spent several months in one of two biggest US credit card processor companies and learned a bit about that. I suggest legal department at Apple studies PCI regulations before it gets hit with federal lawsuit for violating industry compliance standards.
    My understanding of the article is that Apple wants to enable or enhance the NFC reader in iPhone to be able to replace external systems that Square and others use. I imagine that the future feature would be available to app developers to incorporate it into their apps. Then, payment processors won’t need to pair their app with an external reader. 
  • Reply 19 of 28
    GeorgeBMacGeorgeBMac Posts: 11,421member
    First of all this sounds illegal and Apple should learn a bit about financial regulations on processing cards. They cannot be issuer and processor at the same time. I have spent several months in one of two biggest US credit card processor companies and learned a bit about that. I suggest legal department at Apple studies PCI regulations before it gets hit with federal lawsuit for violating industry compliance standards.

    Apple has never issued a card -- at least not any more than any store with a store card has.

    mike1
  • Reply 20 of 28
    Apple's Card is issued by Goldman Sacks. In many ways, it is like many of the affinity cards many other banks issue.
    GeorgeBMac
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