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Apple Inc. is making a change in the mobile point-of-sale hardware it uses at its 254 U.S. retail stores. In an exclusive deal, the consumer-brand manufacturer has begun using mobile POS devices produced by VeriFone Systems Inc., the San Jose, Calif.-based payment-terminal maker says.
Apple outfits its employees with mobile devices to expedite checkout inside its stores. Clerks use iPhones as part of Apple’s EasyPay payment system, which allows iPhone users to walk into an Apple store, take an item off the rack, scan its barcode, enter an Apple ID and three-digit card-verification value to make payment, and walk out.
Now Apple will use the VeriFone PayWare Mobile e315, an iPhone 5- and iPod Touch 5-compatible case that includes both magnetic-stripe and chip card readers and a near-field communication chip for contactless payments. To date, no Apple devices are equipped with NFC chips. Apple did not respond to a Digital Transactions News inquiry. The case also has a built-in PIN pad and a 2D laser barcode imager.
Apple could be preparing for the October 2015 liability shift associated with the U.S. migration to chip cards using the Europay-Visa-MasterCard payment standard.
“The key important factor here is that Apple is upgrading to EMV readiness in the United States,” says Rick Oglesby, senior analyst at Double Diamond Group, a Denver-based payments consulting firm. “They are obviously a pretty large merchant so we can add them to the list of large merchants that are going EMV-ready in advance of the deadline.”
The move also is important to VeriFone, Oglesby notes. “Any movement towards EMV migration is important for VeriFone, which is in a position to make a lot of money during the transition,” he says. “Having Apple on its books as a customer will be an additional boost for VeriFone since Apple is perceived to be a trendsetter in the market and other companies are likely to follow Apple’s lead.”
Apple is keenly watched for any movement within payments, with Tim Cook, its chief executive, earlier this year calling mobile payments “a big opportunity on the platform.”
Though the adoption of EMV-capable mPOS hardware is notable, what it does not portend is anything specific about Apple’s potential long-term digital-wallet strategy or the inclusion of NFC on future iPhone models, Oglesby says.
“NFC is already included in the VeriFone off-the-shelf sleds, and the [card] networks incentivize merchants to adopt NFC/contactless technology within the EMV migration roadmap,” he says. “It therefore wouldn’t make sense to purchase non-NFC sleds which would need to be custom-made, would cost more, and would delay the implementation schedule. Therefore, we can’t draw any conclusions regarding the future of Apple and NFC based on this change.”
In other mobile-payments news, Square Inc.’s Square Wallet app no longer is available on Apple’s iTunes or Google Inc.’s Google Play stores.
According to technology news site Re/code, the apps have been replaced with Square Order, an app that lets consumers make advance orders and pay for those orders at merchants.
Launched three years ago, Square Wallet enables consumers to store their payment data in the app and use them to pay at participating merchants without removing the phone from their pocket. Customers check in with the app when they arrive at the store, and then, when ready to check out, they give their name, mention they are paying with Square Wallet, and walk out with their goods, with payment charged to their stored card details. Clerks pull up the customer’s photo on their terminal to confirm identity.
San Francisco-based Square will continue to support current Square Wallet users, a spokeswoman says. Square Order adds more utility to the purchase experience, “enabling customers to discover nearby businesses, browse menus and place an order for pickup,” she tells Digital Transactions News.
The cessation of Square Wallet is not surprising, says Rick Oglesby, senior analyst at Double Diamond Consulting, a Denver-based payments consulting form.
“Square is in the process of transitioning from being a payments company to being a digital marketplace; that’s where the opportunity really lies,” Oglesby says. “Square Wallet as a stand-alone payment solution wasn’t wowing customers because customers aren’t really looking for new ways to pay. Rather, they are looking for new ways to shop. PayPal and eBay Inc. made each other successful because eBay provided the new way to shop and PayPal provided the new way to pay, they needed to happen together. The same can be said for Amazon and Amazon Payments, iTunes and the iTunes wallet, etc. It’s exceedingly difficult to create new ways to pay unless you are simultaneously creating a new way to shop.”
Square Order is an attempt to merge shopping and payments, he says. “If they can drive consumer adoption of ordering ahead then they’ll get consumer enrollment in the app that they can in the future just use for enhanced in-store non pre-ordered shopping experiences,” Oglesby says. “This will bring a staircase approach to changing payment behavior rather than trying to jump to the next stage.”
