Square partners with Apple to test Tap to Pay service

Currently, iPhone users can pay in-store or on the go by connecting their iPhone to dedicated NFC reader hardware made by companies like Square. The upcoming Tap to Pay feature will allow sellers to collect payments directly through an app on their phone that uses the newly enabled hardware included in iPhones, eliminating the need for separate hardware.

The feature is an effort to embrace the growing customer preference for contactless payment and builds on the expanded NFC capabilities that Apple began introducing in 2019. Apple has been criticized for being slow to unlock NFC functionality for customers and developers, and Tap to Pay addresses an area where its gated approach has attracted official attention. The European Union accused Apple of breaking antitrust law last month by not opening up its NFC features to mobile wallets that competed with Apple Pay.

Square’s agreement to use Apple’s Tap to Pay will give businesses “more flexibility to adapt their commerce experiences to changing consumer preferences,” David Talach, head of financial services at Square, said in a statement. Press release.

The feature will first be 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 Shopify and Stripe’s partnership with Apple was announced in February, Apple said Stripe would be the “first payment platform to bring Tap to Pay on iPhone to its business customers.” Apple did not respond to requests for comment on whether the product would still be made available to Stripe and Shopify customers before those using Square.

Square’s inclusion 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 hasn’t provided the range of payment services needed to make it useful. It has, however, helped Stripe and Shopify—wwhich have ambitions to grow their in-person retail payments—ooutpace the investment Square has made in card-reading hardware.

The strategy is also helping Apple as the tech giant pushes deeper into payments. On the one hand, it makes iPhones more useful to retailers as mobile payment terminals. Even Apple had to use additional hardware to accept payments at Apple Stores. And that potentially adds to the number of sites that accept Apple Pay. Apple gets a tiny chunk of Apple Pay transactions, but keeping customers locked into their iPhones is likely far more valuable.