Square announced Thursday that Apple’s two-way “Tap to Pay” feature, which turns iPhones that can already transmit payment-card numbers into terminals that can receive them, will become available to some Square sellers this summer. Apple announced a similar partnership with Shopify and Stripe in February.
Currently, iPhone users can pay in stores or on the go by tapping their iPhones to dedicated NFC-reading hardware made by companies like Square. The forthcoming Tap to Pay feature will allow sellers to collect payments directly through an app on their phone that makes use of newly activated hardware included in iPhones, eliminating the need for separate hardware.
The feature is an effort to embrace growing customer preference for touchless payment, and builds on expanded NFC features Apple first began introducing in 2019. Apple has faced criticism for being slow to unlock NFC features for developers, and Tap to Pay addresses one area where its closed-off approach drew official attention. The European Union accused Apple of violating antitrust law last month by not opening up its NFC features to mobile wallets that competed with Apple Pay.
The agreement by Square to use Apple's Tap to Pay will provide businesses with "more flexibility to adapt their commerce experiences to evolving consumer preferences,” Square head of Financial Services David Talach said in a press release.
The feature will first become available to select Square merchants through an early-access testing program this summer. Square will then roll it out to all sellers later this year.
When the Shopify and Stripe partnership with Apple was announced in February, Apple said that Stripe would be the “first payment platform to offer Tap to Pay on iPhone to their business customers.” Apple did not respond to requests for comment as to whether the product would still be made available to Stripe and Shopify customers before those using Square.
The inclusion of Square in Tap to Pay could address overblown perceptions that the new feature is a "Square killer." As Protocol noted when it was first released, Apple's unlocking of NFC hardware didn't provide the range of payment services required to make it useful. It did, however, help Stripe and Shopify — which have ambitions to grow their in-person retail payments — leapfrog the investment Square has made in card-reading hardware.
The strategy also helps Apple as the tech giant wades more deeply into payments. For one thing, it makes iPhones more useful to retail businesses as mobile check-out terminals. Even Apple itself has had to use add-on hardware to take payments in Apple Stores. And it potentially adds to the number of venues that accept Apple Pay. Apple gets a tiny cut of Apple Pay transactions, but keeping customers locked into their iPhones is likely far more valuable.