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Apple’s Tap to Pay Will Allow Merchants to Accept Contactless Payments on iPhones

Apple has finally confirmed the rumor that it will soon allow merchants to accept payments directly on iPhones, with no additional hardware required. Square was the pioneer in this space years ago, sending out free credit card swipe readers that connect to an iPhone through the headphone jack to anyone who wanted them. More capable Square point-of-sale terminals followed, and it’s likely that you’ve used one at some point.

Pundits are proclaiming Apple’s new Tap to Pay technology a “Square killer,” but Apple isn’t offering its own service. Instead, the company will provide the capability to partners like Stripe and Shopify, with more payment platforms coming later in the year. Customers will be able to tap a contactless payment method (like an iPhone, Apple Watch, or compatible credit card) to a merchant’s iPhone to make a payment over Apple Pay, using the NFC technology built into all recent iPhones. Like all Apple Pay transactions, the Tap to Pay transactions will be encrypted and processed by the iPhone’s Secure Element, and Apple won’t know what is being purchased or who is buying it. Tap to Pay is sure to be a boost to Apple’s steadily accelerating services business and a boon to small retailers in particular.

Tap to Pay transaction between iPhones

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Comments About Apple’s Tap to Pay Will Allow Merchants to Accept Contactless Payments on iPhones

Notable Replies

  1. It would be nice if Apple could cut out the middleman here and accept card payments as if someone sent Apple Pay cash through iMessage. Just tap an NFC card instead of sending the amount through iMessage. Done.

    I guess the advantage for Apple is that in that scenario they’d get stuck with having to pay ACH fees (could they pass those along to the merchant?), whereas in this solution those fees get paid by Stripe/Shopify et al. who then pass it on to the merchant via their fees. I’d imagine sellers who are serious about NFC payment probably also need a bunch of other software to support inventory/taxes/payroll so maybe they’d be sticking with companies like Square anyway.

  2. Yeah, there’s more than just transferring money from one person to the other. You’d also have to deal with refunds, chargeback processes, fraud prevention, optional receipts, etc. It’s a lot messier than providing the underlying infrastructure and letting payment companies build the management software on top.

  3. Is a receipt sent to the purchaser somehow (from the retailer)?

    If not, then surely that’s going to be problem, as these are needed for expenses and the like – or simply to reconcile bank statements at the end of the month. No record of said transaction = no use for many unfortunately.

  4. This won’t have anything to do with Apple, it will be dependent on the POS software. The existing Square (and iZettle and others) iOS software allows merchants to email receipts or print them if they have an AirPrint receipt printer connected. Presumably this capability will continue to be offered by the payment providers, even if they use Apple’s Tap to Pay. All that’s really being done with the Tap to Pay is that the physical device that reads the card details is being replaced with the RFID chip in the iPhone. I would expect all the layers above (including the POS software, receipts, etc) to be the same.

  5. Sorry yeah I just realised it’s not Apple here is it, they are merely offering the API for other payment providers to use inside their own payment services. Hopefully they’ll ALL have an “email receipts” option whenever you use their payment service to pay.

    Still a shame that vanilla Apple Pay doesn’t have some kind of built-in receipt function, so we wouldn’t have to still collect stupid little bits of paper from every purchase. Oh well.

  6. Those are not without fail - CVS has offered emailed receipts for years. It stopped working mid-December and all they can say is “we know there is a problem”. Took me an hour on the website and customer service call and a visit to the store to get the printed ones working again.

    I do see it with some iPad-run POS systems, but you need to enter your email every time and I rarely have the patience for that.

    Diane

  7. Some of them can link your email address to your card the first time you enter it. Depends a lot on how the merchant has set things up, and what option they offer you.

  8. The idea is that eg. Paypal setup this new tap-on-iPhone API on their system, you could tap and pay using their payment system using one of your cards on their account, and then they obviously would have your email address, so you’d automatically receive an email receipt.

    Of course, how this will actually work across all the various payment platforms retailers may end-up using is anyone’s guess at this stage. But whatever happens, paper receipts really should become a thing of the past ASAP, so it would be highly surprising to me at this stage if Apple/payment providers have nothing worthwhile in place going forward.

  9. I agree about paper receipts. It’s one of my biggest beefs in our large supermarket. I can’t even decline a paper receipt much less get an emailed one.

    Diane

  10. Thankfully, the supermarkets and grocers/butchers/bakers here have stopped providing receipts by default – though you always have the option of getting one. It used to irritate me as there are very few times I need a record of what food I bought.

  11. Off topic.

    What really irks me is that the paper receipt from the grocery store is usually hard to read and sometimes unreadable.

  12. In New York City receipts are required for sales above $20.00. For purchases of less than $20.00, receipts must be given upon request. There are requirements about what a receipt must consist of:

    https://www1.nyc.gov/site/dca/businesses/10-things-business.page

  13. Those of us with the opposite desire have similar problems.

    I want paper receipts. I retain them until I get the statement from my card, and then I reconcile the paper slips against the statement, in order to make sure there isn’t anything unexpected.

    Many stores have stopped offering paper receipts altogether. Which means I now have to go home and print my e-mail, wasting an 8x10 sheet of paper instead of a small piece of receipt paper.

  14. I do that too. But it doesn’t require printing for me. A simple PDF record kept in a folder does it. The statement gets cross-checked against anything in that folder.

    Usually, I don’t want paper at all. But in the rare instances where I need it (usually due to reimbursement), I really want to have the option. What I absolutely hate doing is supplying e-mail or phone number to get a receipt. It would have to be a mighty important receipt for me to do that. If I didn’t run my own email server that allows me to create ad-hoc addresses exactly for this purpose (where I can throw the address away after using it once without later ever getting any spam related to it), I’d probably rather use a mailinator address.

  15. As per @Simon – I too want the receipts, just not really paper ones. Currently I have a simple receipts email folder for online purchases and those few physical places that issue receipts to you this way, and reconcile my monthly bank statements via those along with the paper ones we have to deal with now from the majority of physical stores.
    (yep, I also sometimes have to ask the retailer for a receipt –normally paper ones– if they don’t just give me one at the physical checkout, lol!)

    The idea going forward is that instead of physical ones, they can be optionally emailed to you, or perhaps better, a digital receipts area of Apple Wallet (obviously not tracked by Apple, under their normal non-tracking policies they already adopt for Wallet!) with ‘save as PDF’ functionality, so they can all be dealt with digitally, instead of having some digital and some paper to pile through monthly.
    Additional side benefit being –for those that need receipts for expenses accounting or whatever– can also keep them easily without having to scan the stupid bits of paper or whatever.

    Basically, why does receipts tracking have to be so painfully annoying in 2022 and beyond, lol!

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