Dive Brief:

• As more companies and consumers adopt contactless payments, Apple said Tuesday it plans to introduce Tap to Pay on iPhone later this year. The feature will enable sellers to accept Apple Pay, contactless credit and debit cards, and other digital wallets by tapping their iPhones, according to a press release. 
• The fintech Stripe will be the first customer to integrate the tool for businesses, including for e-commerce site Shopify "this spring," with others added later this year, Apple said. The feature, which won't require additional hardware, will work on iPhone XS or subsequent devices, and will accept contactless credit and debit cards, including from American Express, Discover, Mastercard and Visa. 
• Apple will integrate the feature into its retail stores later this year, per the press release. The Tap to Pay on iPhone tool will encrypt transactions using the same security technology used for the company's Apple Pay consumer payment tool. 

Dive Insight:

Apple noted in its announcement that 90% of U.S. retailers already accept Apple Pay as a payment method from consumers, but the introduction of this new tool for merchants signals Apple's deepening interest in payments.

"As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone," Jennifer Bailey, Apple's vice president of Apple Pay and Apple Wallet, said in the company's statement.

As Apple eyes payments services as a means to bring in additional revenue, the launch of more payment tools could be a blow to competitors already offering such services, namely Block, parent company to the Square merchant tools business. But that also means Apple is playing catch-up on this front.

Apple is just the latest payment provider to offer tap-to-pay payments. About a year ago, Mastercard teamed up with NMI and Global Payments to introduce a Cloud Tap on Phone tool. Phone maker Samsung also rolled out a phone payment acceptance application in 2019, according to a Bloomberg report. 

Research suggests the payment method will continue to grow in popularity. A 2021 report from Juniper Research said shipments of mobile point-of-sale terminals are expected to grow to 32 million by 2026.

While the pandemic gave a boost to contactless payments, according to a 2021 Visa report nearly two-thirds of U.S. shoppers would like to transact via contactless payments either as much as they do now or more in the future.