Apple is expanding its relationship with payments tech company Square for the Apple Pay platform, in that Apple will sell Square’s NFC reader at both its online and retail stores network. Later generation iPhones plus the Apple Watch can take advantage of the NFC technology. Square has already been a supplier to the Apple retail network via its mag stripe card reader.
Square has announced that its new NFC reader that enables small businesses to accept Apple Pay, Android Pay, and other contactless payments can now be purchased from Apple online or in U.S. stores for $49.
The reader is compatible with NFC-equipped smartphones, including the iPhone 6 or newer, and contactless EMV chip debit and credit cards based on technologies like American Express ExpressPay, MasterCard PayPass, and Visa payWave.
The NFC reader, which connects wirelessly with iOS and Android devices via Bluetooth, also works with EMV chip cards that are inserted for Chip-and-Signature payments. Square includes a magstripe reader in the box for accepting traditional swipe payments as well.
Launched in 2014 to mostly large merchant chains, Apple Pay has limited availability across the different tiers in the retail world. This expanded partnership with Square will enable Apple Pay access to small and medium sized merchants. However, there will still be educational and acceptance hurdles to cross, for both merchants and retail customer users alike in warming up to Apple Pay.
Meanwhile, Square is still trying to find its sea legs during its first year as a public company, and they clearly need a boost to grow their revenue base and earnings potential. While this deal will not be a panacea for their near term performance, it never hurts to have Apple as your partner.
Overview by Raymond Pucci, Associate Director, Research Services at Mercator Advisory Group
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