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Apple Faucet to Pay: how will you acquire funds together with your iPhone?

From virtual credit cards to contactless payments, Apple wants the iPhone to replace your wallet. But while buyers might be equipped to ditch their billfold, what’s in store for small business owners? Tap to Pay: a feature which allows merchants to accept contactless payments on an iPhone.

Whether you’re a shopper or a shopkeeper, you’ve probably seen or used a contactless card reader. The key difference with Tap to Pay? You don’t need any additional kit to set up shop. No keypad or terminal: just a compatible iPhone, which you might already own.

Besides making it simple to set up, this could help to keep costs down at a time when bills are soaring. So how will Tap to Pay work? And when and where will it be available? We’ve covered all the details below.

What is Tap to Pay?

Tap to Pay will allow business owners to accept contactless payments from customers using an iPhone. Previously, processing these transactions at the point of sale required some kind of dedicated terminal, such as PayPal’s Zettle card reader. But with Tap to Pay, you won’t need any additional hardware: just a compatible iPhone.

So whether you’re washing cars, running a café or selling your wares at a pop-up shop, you’ll be able to key in purchases and take payments. All wirelessly, all using an iPhone you might already own. Which should help to keep business costs down.

Besides its palm-sized portability, the iPhone’s cellular connection should also give merchants the versatility to put transactions through when they’re away from Wi-Fi. Handy if you’re a traveling salesman.

How does Tap to Pay work on iPhone?

At checkout, customers will be able to present their contactless card, Apple Pay device or digital wallet to the top of merchant’s iPhone. The transaction will then be completed wirelessly via the mobile’s NFC chip. So for shoppers, the experience should be pretty much the same as using any other contactless card reader. It’s just that you’ll be tapping an iPhone.

How the system will actually look for merchants is a matter for developers: Tap to Pay won’t be a feature available through iOS by default. Instead, it will be an option for third-party payment platforms to add to their own iOS apps. So you’ll need to be sign up for one of these to use Tap to Pay.

Stripe, for example, is the first gateway to offer Tap to Pay as an option for business customers running iOS. That’s a pretty big deal, given the popularity of the platform – and the fact that Shopify’s Point of Sale app is supported with it. Adyen joined the party in April, with additional providers in the pipeline, including Chase and Worldpay.

As with Apple Pay, Tap to Pay transactions are secure and encrypted. Apple doesn’t get to see what’s being bought and sold, either. Like to reward your regular customers? Tap to Pay will also support loyalty cards for contactless discounts, as well as offering the option to scan cards without charging them – useful for processing refunds without a receipt, or saving payment details to a customer’s file for future payments.

Which iPhones work with Tap to Pay?

While every iPhone since the 6 has shipped with an NFC chip built in, not all of those models will support Tap to Pay. According to Apple, the feature will only be available – through supporting apps – on the iPhone XS and later devices. That seems to include the two iPhone SE reboots, which were modeled on the iPhone 8 but launched several years after the XS.

The Tap to Pay protocol was enabled for developers in iOS 15.4, while Adyen’s solution requires iOS 15.5 or later. So support for this software version is probably a pre-requisite for accepting contactless payments.

When and where can I use Tap to Pay on iPhone?

While third-party Tap to Pay provision is clearly in the works, it’s still not available to small businesses on a widespread basis. Apple didn’t confirm a release date for the feature, stating only that it would be available “later this year”. Both Stripe and Adyen are allowing sellers to register their interest, but this is aimed more at merchants who’d like to build Tap to Pay into their own apps.

Tap to Pay is expected to launch fully across the US before the end of 2022. It could be that certain providers are timing their roll-out to align with the release of iOS 16, which is due in the next few months. Until then, you can try it as a buyer in a handful of US retail outlets and Apple Stores, including the Apple Park Visitor Center.

The Apple Park Visitor Center is one of the only apple retail stores in the US to support contactless pay straight from an iPhone. Awesome to see in person! pic.twitter.com/GiFDiL56OO

— Michael  (@NTFTWT) May 15, 2022

Whenever it arrives, Tap to Pay is only scheduled for release in the US at present. Apple hasn’t announced any plans for a launch in the UK or other countries, so international merchants will have to wait and see. And if you are a seller in the US, you’ll need to use one of the compatible payment providers if you want to accept Tap to Pay on your iPhone.

Will Apple ever allow iPhone users to receive personal payments from their pals via NFC? Only time will tell.

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