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Tap-to-pay technology for ordinary smart phones is a relatively recent development, but payments companies aren’t wasting any time offering it as it spreads into new countries. The latest example comes from Canada, which became the latest market expansion Thursday for Apple Inc.’s tap to pay on iPhone technology.
The first processors to offer the iPhone option in Canada are Adyen, Moneris, Stripe, and Square, Apple said. They will be followed by Aurus, Chase Payment Solutions, Fiserv, and Helcim “in the coming months,” the company added.
For its part, Square, part of San Francisco-based Block Inc., announced early Thursday it is offering the technology to merchants in Canada through its iOS apps Square POS, Square for Retail, and Square App.
Apple launched Tap to Pay on iPhone in 2022 and has deployed the technology in nine countries, including Australia, Brazil, France, Japan, Netherlands, Taiwan, Ukraine, the United Kingdom, and the United States. Like the similar tap to pay on Android version of the technology, tap to pay on iPhone allows merchants to accept contactless card payments with an ordinary smart phone equipped with tap-to-pay software. No dongles or other attachments are needed. Apple says it does not store card numbers on its phones or servers.
Observers say the expansion into Canada represents a sizable opportunity for Apple as well as for the technology. The move also sets up future expansions for tap to pay, they say. “The real downstream opportunity is you’re moving into software,” says Thad Peterson, an analyst who follows payments at Datos Insights. “You can drop it into devices that are not dedicated [point-of-sale terminals].”
Despite the steady move into more national markets, however, Peterson cautions that further expansion around the globe, and even within current national markets, will be moderate for tap to pay. “There’s enterprise opportunity down the road, but it isn’t going to happen overnight,” he says. “It’s going to take a while, but it will eventually get into all aspects of POS.”
For one thing, he expects the technology will be limited for some time to small sellers, as big chains continue to rely on sophisticated POS systems. “Think about all the terminals Kroger has, think about cost of replacing all those,” he notes. “It’s going to be a long process.”
But for now payments providers will take what they can get among smaller sellers. Square’s offering works on the iPhone XS version or “later running the latest version of iOS,” the company says. But it is clearly eyeing business with larger sellers. “With Tap to Pay on iPhone, we are further levelling the playing field for businesses of all sizes to be able to start, run, and grow,” said Saumil Mehta, head of product at Square, in a statement connected to the company’s tap-to-pay offering in Canada.
