Apple wants to turn your iPhone into a contactless payment terminal

Apple is constantly adding new features to the iPhone, and some of those features make other products obsolete. On Thursday, Bloomberg reported that Apple is working on a new service that will let iPhones accept payments without requiring any additional hardware. In effect, the feature will turn every iPhone into a payment terminal. This might well eliminate the need for devices from companies like Square and Toast.

iPhone payment terminal feature coming this year

As noted by Bloomberg’s Mark Gurman, Apple acquired Canadian company Mobeewave in 2020 for $100 million. Mobeewave created a system that allowed smartphones to accept payments with one tap. Mobeewave’s technology uses near-field communication (NFC) to complete transactions, which every modern iPhone is equipped with.

Gurman points out that this isn’t currently possible on an iPhone. If an iPhone user wants to accept a payment from a credit card or a digital payment service right now, they will need to physically plug the iPhone into a payment terminal or have it connect via Bluetooth.

Depending on how Apple implements the service, other digital payment companies could be in trouble. Gurman explained how Apple could give Square a run for its money:

The move could impact payments providers that rely on Apple’s iPhones to facilitate sales, such as Block Inc.’s Square, which dominates the market. If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware. If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square.

When Apple bought Mobeewave two years ago, it acquired the entire team that was working on the technology as well. According to Bloomberg, those employees have been working with Apple’s payments division ever since the acquisition. That said, it’s still unclear if Apple plans to brand the payment hub as part of Apple Pay or establish a new brand.

How long until Apple launches the feature?

Bloomberg’s sources claim that Apple will include the feature in a software update in the coming months. iOS 15.3 just rolled out to the public on Wednesday, patching a number of critical security flaws. As such, the first iOS 15.4 beta should roll out any day now. If Apple sticks to its customary release schedule, the final release should be ready before the end of the spring.

Rumors suggest that Apple will host a virtual event in March or April. Bloomberg recently reported that Apple will announce a new iPhone SE, iPad Air, and a Mac running on Apple’s custom silicon at the event. While the company has everyone’s attention, it might also officially reveal the new payment service. Apple is more than happy to announce new products in press releases if it doesn’t have enough to necessitate a full-scale event. The release of iOS 15.4 would give Apple one more reason to go all out for a spring event. In the meantime, we’ll be on the lookout for iOS 15.4 beta 1.