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Apple's Tap to Pay not Apple. Apple may or may not charge a usage fee to the
merchant or processor, but that too is ordinary in our
industry altering – yet industry. What could allow this innovation to be even
more transformational is if Apple used this innovation
as part of a newly developed person-to-person payments
By Ken Musante infrastructure.
Napa Payments and Consulting Just the payfacs, ma'am

pple is preparing to release Tap to Pay, a fea- As a payfac, Apple could enable each individual who
ture that allows U.S. merchants to download downloaded the app to be a sub-merchant of Apple. That
an app to enable an iPhone to accept NFC arrangement could be one pillar of Apple’s Cash app, which
A transactions in a card-present environment. would enable individuals to conduct all their banking and
About this news, CNBC wrote, "The announcement effec- payments. Apple already has a consumer credit card, and
tively turns iPhones into point-of-sale terminals without with Zelle or Venmo connected to their Cash app, it could
additional hardware." Though this is innovative and be a category killer for banks.
groundbreaking, it's not industry altering. At least not yet.
The Cash app (CApple) could easily accept checks via
Incomplete news remote deposit capture in addition to other funding
avenues. Apple could have done this even without the
This is partially true. The development obviates the need sub-merchant feature, but this innovation provides one
for a card reader for chip transactions. This will put a additional and unique funding method, which increases
dent in the sale of BT card readers. A merchant account the functionality of the Cash app as it can now be funded
is still required, however and initially, Stripe will be the from card payments.
only acquirer offering the service. For its part, Stripe will
still need to offer card readers for Android apps and a
host of other instances. A high-volume retailer still needs
to accommodate the magstripe for gift cards and fallback
transactions on iOS and Android. High-volume retailers
may also desire a form factor for the card interaction
separate from a cell phone. Stripe acknowledged this with
their purchase of BBPOS earlier this year.
At the margin, this innovation lessens the cost for
merchants in two ways. First, in many instances, it
obviates the need for a reader. Second, it can ensure more
transactions qualify for card-present rates and lessen fraud
by providing the protection afforded an EMV transaction.
Though Stripe is the only initial supported platform,
Apple will certify additional processors in due time.

David Leppek, founder and CEO of Pace Software, has
been developing payment apps. "Apple's pursuit of Tap
to Pay is huge," he stated. "Their technology was acquired This is speculation, but it illustrates the possibilities.
with Mobeewave in 2020, and it was a pursuit of the Apple, which likely has already planned the end game,
CPoC [Contactless Payments on a Commercial off-the- may determine it's better to monetize the solution
shelf device] EMV standard. Apple has the ability to push through processors like Stripe and Block (formerly
this technology to all future Apple users. Any Android Square) rather than competing directly with them. Yes,
solution, on the other hand, would have to have the user their announcement is innovative and groundbreaking
download their App. but at the margin. Until it's further applied, it doesn't
significantly alter the landscape.
"Android CPoC/MPoC solutions are also moments away,
so this technology is poised to push contactless and
empower the micro merchant, but there are other use As founder of Humboldt Merchant Services, co-founder of Eureka
cases being explored that could take advantage of Apple's Payments, former executive at WePay, and founder of Napa Payments
willingness to offer Tap to Pay.” and Consulting, Ken Musante has experience in all aspects of successful
ISO building. Contact him at kenm@napapaymentsandconsulting.com,
Unlike with ApplePay, it will be impractical to charge 707-7656 or www.linkedin.com/in/ken-musante-us/.
issuers. Merchants need to accept every card presented
regardless of whether the issuer struck a deal with

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