A card machine in your pocket at all times?

by George Lovell | | 0 comments

Apple recently announced "Tap to Pay" - a feature that enables iPhone users to exchange money by tapping their phones together. This function works via the NFC (near field communication) chip, which enables short-range, wireless communication between two devices.

This effectively makes the iPhone a point-of-sale terminal, meaning it can be used to pay for goods and services - similar to contactless transactions made via Apple Pay, but without the need for a card machine. Users will be able to pay via Apple Pay, Visa, Mastercard, etc.

This product will put Apple in direct competition with Block (previously Square), who's equipment has been making waves in the payment space for small businesses in recent years - think of the tiny white card readers in shops and restaurants. Block's share price dropped after Apple's announcement. Still, two very strong companies have in your investment portfolio in our opinionūüöÄ

Tap to Pay will be available in the US initially. Stripe will be the first payment operator to be compatible with the platform, suggesting it will be integrated into Shopify stores - like ours! That being said, Apple are notoriously slow at rolling out new features to the rest of the world, so this might not be available in the UK for years.

As is always the primary limitation of Apple products; it's their restrictive programming and incompatibility with third party software. Companies such as MagicCube rely on open payment solutions, meaning their programs require authorised access to Apple's NFC chip. The efficacy of these payment systems, and the propensity of businesses and individuals to adopt them, will be slowed if Apple restrict access to third parties. Imagine running a shop, and using a payment system that only accepts Apple or Android. That's no good is it.

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