23 March, 2023

Apple goes into credit card business

Apple invests in a system that turns iPhones into POS payment systems.

photo by rbs

Apple Retail taught the company a great deal concerning the future of retail, and a quiet technology acquisition shows it intends to go with the retail flow as it invests in a system that turns iPhones into POS payment systems.

Apple Pay and Apple Payments

While we already use Apple Pay to purchase items contact free using iPhones and Apple Watch, a lot of retailers rely on third party when it comes to payment solution. Square, Izito, PayPal Here, Sumup and other providers work to fill the gap – usually using some form of dongle.

Apple has now invested Mobeewave.com, a company that has been developing technologies to use the built-in NFC chip inside iPhones to accept payments. A report indicates the deal cost around $100 million, and means Apple now has a tech it can use to take payments using iPhones.

The deal was confirmed with the company’s now-customary statement that it “generally” doesn’t discuss its plans when purchasing smaller firms.  

What could this imply?

this enables retailers accept credit card and smartphone payments using their smartphone and the built-in NFC chips on cards and devices. It’s a simple task: retailer inputs the cost, the card/phone is tapped on the device and payment is exchanged.xchanged.

Interestingly Samsung has been working with Mobeewave since 2019.

When that partnership was announced, Mobeewave co-founder, Maxime de Nanclas, said:

“There are an estimated 25 million micro-merchants and approximately 5.5 million small merchants worldwide, many of whom are unable to grow their business due to a lack of easily accessible and affordable payment acceptance services.”

One step ahead

Of course, with Apple behind this technology its reach could be much wider than smaller retail concerns – and (inevitably), Apple will likely make a micropayment profit on every transaction made, just as any other payment processing provider already does. Those margins become even more valuable if the company manages to convince us to purchase products with an Apple Card.

It is noteworthy that Apple now holds technologies that support and profit from the entire retail ecosystem, from the devices you use to select items to those you employ to pay for them, with the company extracting a little value from across the customer journey.

Augmenting the sales cycle

Apple’s focus on retail isn’t awfully surprising. After all, not only does it run its own global chain of retail stores, but iPhones and iPads are in use at retailers worldwide.

You’ll find them in place in hotels, restaurants, clothes stores, fashion brands, car distributors – just about anywhere that’s customer-facing is using or has at least considered using Apple’s mobile solutions within their sales floors.

Apple’s work with augmented reality (AR) shows it has a retail-focused vision for that technology – it’s partnerships with Lego and IKEA show it is thinking hard about how AR can introduce new dimensions both to the physical products themselves and to the customer journey.

The company also knows that its products are seeing rapid deployment across the retail sector – and its ventures into payment systems suggest its motivation. After all, when almost 80% of consumers worldwide are using contactless payments, the value of all those tiny processing fees soon mounts up.

It’s also a natural progression. Apple’s vision for the iPhone to replace the wallet began over a decade ago, and the company has worked with some of the world’s leading NFC experts to develop this vision. It now intends the device (and by inference the watch) to replace everything you traditionally carried in your pockets, from cash to car keysnotebook and pencil to government ID. Of course, this extends to payment acceptance systems.

Regardless, with government regulators now paying close attention to what the Big Tech firms are doing, the company will need to tread a delicate dance as it moves to bring the newly-acquired Mobeewave tech to market.

In doing so, it must (or should) ensure it enables fair competition in the payment processing space. That’s not a problem now with the company holding zero market share on that side of the retail exchange, but as time marches on it may become one.