In February of last year, Apple launched a product called Tap to Pay on iPhone, but it was only available in the U.S.. Today, Apple is making this feature live in Australia.
To use Tap to Pay on iPhone, businesses who have a business account with Apple will just need to download a supporting payment platform app from the Apple App Store on an iPhone Xs or later device running iOS 16.4 or later. Once enabled, businesses will just hold out their phone to customers, who will then pay as they would at an Eftpos terminal if they were using contactless. You can also enter a PIN if required.
It’s a no-brainer that Apple would bring Tap to Pay on iPhone down under – Australia has one of the highest usage rates of contactless payments. The last record from the Reserve Bank was before the pandemic, and it says 55 per cent of all in-person transactions were performed via contactless tap-and-go payments.
You can only imagine what the stat is now, post-COVID.
But that’s on the consumer side – if a business couldn’t afford an Eftpos terminal, or they sold in a mobile location like a pop-up store or at a market, they for many years had very limited options. One option was a Square reader.
The Square reader is a credit and debit card reader that allows merchants to accept payments on their smartphone or tablet device. It plugs directly into the headphone jack of any iOS or Android device, and the customer taps (or insert) their card for a cost of 1.9 per cent of the sale to the business.
Last month, however, Square upped the ante, launching Tap to Pay on Android, which gives sellers the ability to accept contactless payments via Square with just their Android phone.
But that’s just Android and as we all know by now, things are very different between phone operating systems.
So Apple is definitely filling a gap with Tap to Pay on iPhone.
The thing with Tap to Pay on iPhone, however, is that the customer doesn’t need to have an iPhone – they just need an NFC-enabled payment type. That means you can pay on an iPhone using a Google Pixel or other Android phone.
We don’t know what fees banks/payments platforms will charge businesses to use the feature, but Westpac and Tyro Payments are the first payment platforms in Australia to offer Tap to Pay on iPhone to their business customers. Additional payment platforms and apps, including ANZ Worldline Payment Solutions, Stripe, Till Payments, and Zeller, will make the capability available in the coming months, Apple said.
ANZ was the first Aussie bank to sign up to Apple Pay back in April 2017, adding customers to its service in droves while the other big banks took the iPhone-maker to the ACCC, upset that Apple wasn’t giving them free access to its NFC technology. Anyway, that’s all in the past and the future is looking a little easier for small businesses in Australia with Tap to Pay on iPhone.
Update: As you can imagine, Square wasn’t too happy with the headline of this story. So, we feel it crucial to mention that Square is actually a partner of Apple’s in this Tap to Pay on iPhone endeavour. It’s a good move by Square, one that sets them up to avoid being the next Blockbuster Video. Its head of financial services said: “As commerce continues to rapidly evolve and contactless adoption in the U.S. continues to grow, Square is focused on ensuring sellers of all types and sizes have the technology needed to delight their customers and never miss a sale,” and it seems Square is keen to work with Apple so its entire business model doesn’t get torn apart.
This article has been updated since it was first published.