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Apple Could Turn iPhones into Payment Terminals—RIP Square

The feature will reportedly arrive in the spring with the public launch of iOS 15.4.

iPhone payment
Photo: Victoria Song/Gizmodo

Apple is reportedly set to launch a service that would let businesses use their iPhones as payment terminals with no additional hardware—a move that could put pressure on market leader Block (formerly Square).

As Bloomberg reports, the feature has been in the works since 2020 when Apple paid $100 million to purchase Mobeewave, a Canadian startup whose contactless payment tech only requires NFC. The ability for small businesses to accept payment using only their smartphone will reportedly be arriving in a software update “in the coming months.”

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For merchants to receive cardless payments today, they need a third-party payment terminal—the device you insert your credit card into or tap your phone on when making payments at a store. When Apple’s feature arrives, businesses can throw those out and instead accept payments by having customers tap their phones or cards to an iPhone used by the merchant.

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Removing the intermediary could impact other payment platforms, including Square. The digital payments company co-founded by Jack Dorsey sells point-of-sale systems to small and medium businesses. If you’ve purchased a meal from a food truck, bought merch at a concert, or shopped at a local small business, then you’ve probably made a purchase through a Square terminal. The company’s current products scale from tiny card readers you can connect to your phone either wirelessly or via a 3.5mm jack, up to large tablet-sized registers.

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As Bloomberg notes, Apple may allow any payment app to use the new technology, which would allow Square to accept payments from Apple devices without its hardware. However, if Apple uses its own payment processing system, current payment terminals would be made redundant. Other crucial details are still unknown, including what sort of fee Apple will take and whether the Mobeewave tech will be branded as part of Apple Pay.

The payment feature will supposedly launch as part of iOS 15.4, which launched as a developer beta today. Bloomberg says the final launch of the OS will be in early spring, around the time Apple is set to debut a new iPhone SE and iPad Air with 5G.