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How Apple is turning iPhones into payment terminals

Apple’s push to secure a spot in the payments ecosystem is still going strong. Or at least that’s the plan — executing on it may be … well, not that simple. This is because Apple has been making moves to build a network of merchants, among the most critical components of the payment value chain … with functionalities that are already out there in the market.

As reported recently Apple is moving to enable small businesses to accept payments, via iPhones, without having to install any additional hardware. But is this functionality good enough to compete with the huge traditional players in the industry?

When taking this in, the first thing that comes to mind is a topic that has been trending in the industry for quite some time now, which is inclusion. What's interesting is that the likes of Alibaba already offer similar functionalities for small merchants in Asia.

Through these easily accessible payments-facilitation tools, they offer small and micro- merchants the possibility to accept payments. Notably, this is a wonderful example where FinTech creates inclusion for small and local businesses  who otherwise wouldn’t have the opportunity to run a business in the ever growing digital world.

The increasing competition against the traditional players

In light of the surging demand for digital native financial services, Neobanks are increasingly competing with the big banks, pushing them to come up with plans to innovate and digitize their services. However, the competition doesn’t stop there as we are seeing  more and more players entering the POS and SmartPOS arena.

Who is Apple’s iPhone terminals Targeting?

While Apple seems to be denying sharing specific details as of yet, it is quite clear that small vendors and local businesses can truly benefit most from this solution most, since it can easily replace the hassle of QR code payments while offering strong customer authentication and trust. But the question remains, what kind of fees will Apple charge these merchants?

Apple: Computer makers to payments powerhouse

After being the leading computer and smartphone brand for many years, Apple clearly has been beefing up its fintech services. It launched its own credit card with Goldman Sachs in 2019 and is reportedly working on a "buy now, pay later" service.  Given Apple’s huge influence, we believe that the company will face regulators who will likely intervene to prevent the brand from becoming a full monopolist. We are really curious about Apple’s future in FinTech!

What functionality do you think Apple has to offer in order to disrupt current players?

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