Anyone with an iPhone will soon be able to accept contactless payments directly on their device. Apple just announced Tap to Pay on iPhone, a feature that leverages NFC technology to support transactions between an iPhone and Apple Pay, contactless credit cards or other digital wallet platforms.
According to the press release, Tap to Pay will roll out for payment platforms and app developers in an upcoming iOS 15 software beta. American Express, Discover, Mastercard and Visa credit cards with contactless payment options will all be Tap to Pay eligible, as will the Stripe-owned Shopify Point of Sale app starting sometime this spring.
This means no additional hardware or payment system will be needed for small business owners and large retailers alike to carry out transactions. A merchant can prompt a customer to hold a contactless payment method close to the merchant's iPhone to complete a payment.
Again, the payment method could be another iPhone or an Apple Watch with Apple Pay, as long as you know how to use Apple Pay with your iPhone or how to use Apple Pay on Apple Watch. An NFC-equipped credit card or an alternative digital wallet will work too.
Bloomberg's Mark Gurman, who previously reported plans of such a feature for iPhone, dubbed Tap to Pay the "Square killer." For several years now, Square's payment terminals offered a bridge between contactless payments and mobile devices such as iPhones and iPads. But Tap to Pay eliminates the middleman, allowing iPhones to accept payments directly.
As for privacy, Apple's press release says that "customers’ payment data is protected by the same technology that makes Apple Pay private and secure." Transactions will be encrypted, so Apple will have no way of knowing what is purchased or who is doing the purchasing.
“As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone,” said Jennifer Bailey, Apple’s vice president of Apple Pay and Apple Wallet in the press release announcing Tap to Pay.