Apple and Tap to Pay: ramifications in the industry

Apple has recently announced that it entered the contactless payments market after adopting the Tap to Pay capability. The first partnership with Stripe and Shopify brings the tech giant into an emerging payments sector, proving once again that any company can jump on the financial services bandwagon.

Financial services bandwagon?

We start seeing that it is possible for virtually any company can start offering financial services. From Uber and Lyft, who said ‘hey, why don’t we become a bank for our drivers?’ to gyms that included money management solutions between workouts, the possibilities are limitless. But more on this in a future article.

By introducing Tap to Pay, Apple turns its iPhone into portable POS systems. The US market expects the functionality later this year. So, what does this mean for the payments industry in general and contactless transactions in particular?

iOS to match Android efforts

Currently, the majority of Tap to Pay-enabled phones run on the popular Android operating system. This translates into close to a third of the smartphone market being overlooked when it comes to contactless payments. Apple, through its recent announcement, will seek to change that and, together with Android, allow every smartphone user to potentially benefit from this financial service.

We must see this as not competition between the two rivals but as a chance to motivate each other to improve and innovate contactless payments and enable financial inclusion.

Having a company as big as Apple validate the contactless payments space acts as a huge uplift for the industry. We mustn’t forget that startups such as Dapio paved the way for the tech giant by going through all the trials and tribulations that made this sector as popular and attractive as it is today.

Also, this move legitimizes the Tap to Pay capability even more and it will be interesting to see how the iOS will adapt to and improve the technology.

The shadow of contactless payments grows bigger

Apple’s announcement is only the beginning of something that could prove to be quite interesting. Coming from a company that can spread the word like wildfire due to its popularity and loyal consumers, Apple’s addition of Tap to Pay will allow the capability to reach the ears and minds of new customers, which will, in turn, raise customer demand, the latter causing solution providers to seek innovation.

With both iOS and Android now capable of accepting Tap to Pay technology, merchants of any size have more leverage to opt for a SoftPOS solution and cut down costs. Contactless payments bring down the barrier between businesses and consumers by improving the user experience and reducing costs and wasted time.

As the VP of Apple Pay and Apple Wallet said, businesses can opt for Tap to Pay and benefit from a secure, private, and pain-free way of enabling contactless transactions and finding new checkout experiences through the convenience of a smartphone.