What Apple's Latest Purchase Means for Cash

Swiping is dead, long live tapping

Key Takeaways

  • Apple buys Mobeewave, a company that lets you accept credit cards just by tapping them on your iPhone.
  • Cash payments have dropped significantly since COVID-19.
  • iPhone payments may be most useful for individuals and traders who don’t already accept cards.
Using Apple Pay with an NFC card reader
Apple

Apple has purchased Mobeewave, a company that turns phones into credit card terminals. This means that, in the future, you may be able to accept credit card payments with your iPhone just by tapping the card on the back. No magnetic stripe readers or other external boxes will be required; just an app.

This technology is already available for Samsung phones, but Apple could take it to the next level. Every iPhone owner in the world also has an Apple ID, and most have a payment method tied to that ID. Just like you can use Apple Pay now, tapping your iPhone onto a terminal in a store to pay for goods, you might be able to do the opposite, and tap to receive payments.

This could revolutionize the way we pay each other.

What Difference Does This Make?

In many countries, the credit card is already most people’s default payment method. And almost everywhere outside the US, NFC card terminals are the default. Those are the terminals that wirelessly read the chip embedded into a card. Almost nobody uses magnetic strip readers to swipe cards anymore. Those remain only for legacy compatibility, and they’re far less secure.

In the UK, where contactless payments are already the norm, cash is almost dead. “I can’t remember the last time I used cash,” UK-based writer Luke Dormehl told Lifewire. “It’s heading more in the direction of contactless payments.” Even going to the pub, or buying a chocolate bar or a soft drink from the corner store, most people use a credit card or their phone to pay, he says.

In turn, this makes cash even less convenient when you do need it. The Apple/Mobeewave setup could open up entire new markets for small traders. Imagine being able to pay by credit card at a pop-up flea market when you’re on vacation. You could even find some second-hand furniture on your local Craigslist and use a credit card to pay the seller when you pick it up.

How Will It Work?

Last year, Mobeewave partnered with Samsung for a pilot scheme in Canada. The beauty of the system is that it works with existing technology. Credit cards need to contain a chip, and almost all modern credit cards already do. This is the chip that makes existing contactless payments possible at the gas station, the coffee shop, or supermarket checkout.

Then, the receiving phone needs to contain an NFC chip reader. The iPhone 6 and newer support paying in stores with Apple Pay, but you’ll need at least an iPhone 7 to read NFC chips. Presumably, then, if you have an iPhone 7, you’ll be able to accept card payments. In the existing Mobeewave app, you just enter the amount to be paid, and then the customer taps their credit card onto your iPhone (or just waves it nearby). That’s it. They may have to enter a PIN, depending on their credit card setup.

You should even be able to pay directly from one phone to another. The customer would use their iPhone’s Apple Pay feature in place of a physical credit card, and tap that onto the seller’s iPhone.

Cash and COVID-19

The COVID-19 pandemic has caused a serious drop in cash payments. In Germany, cash is still the default, and until a few years ago, even some large chain supermarkets would only accept EC (electronic cash) debit cards, not credit cards. This has changed. I visited two local cafe owners to ask how this technology might affect them.

“Since Corona(virus), 80-90% of customers pay by credit card,” Ferhan Güllü, owner of Elf Café in Berlin, told Lifewire. To meet this demand, the café signed up for a standard credit card merchant package with its bank. “It’s expensive, but necessary,” he said. Prior to that, they tried a third-party gadget to accept cards, but it was unreliable. Güllü says he’s unwilling to add more mobile technology.

The Apple/Mobeewave system, then, may end up being most useful for individuals, not business—even small businesses. And in many cases, it may be too late anyway. Evelyn Csabai, co-owner of another Berlin café and restaurant, Lola Was Here, told us that their new business account includes Visa. Asked if she would change to a possible new Apple option, she pressed her wrists together, as if handcuffed. “I’m tied up now,” she said.