8 ms·

The real news is Apple specifically took a non competitive stance — making the API available to third parties like Stripe - rather than building in house, lever

The real news is Apple specifically took a non competitive stance — making the API available to third parties like Stripe - rather than building in house, leveraging Apple Card connections, or similar

kazanins 5y ago
Hey! Apple Card is also a partnership (with Goldman Sachs). Goldman is not in acquiring business, so Apple had to find another partner
artursapek 5y ago
They probably don't want any more anti-competitive criticism right now.
monkeynotes 5y ago
I am surprised Apple didn't make this a closed system and compete with Square for small businesses.
- davnicwil 5y ago
  Think it depends on the lens you view this with. If it's iphones have reached saturation with small business owners, let's build a business on top of that already dug and locked in moat, then perhaps. If it's offering this feature is a driver for more small business owners buying and sticking with iphones and the accompanying ecosystem, you can see how it's perhaps the smarter play to be an open platform here.
  - btown 5y ago
    Right - the last thing Apple wants is to let Google take the high ground of "only our platform makes this business-critical API available to multiple apps, therefore if you're a small business owner you need to choose Android."
- sn1de 5y ago
  It competes with anyone selling point of sale hardware. I think Square falls into that camp, no? I wouldn't want to be in that space right now. I don't see how this doesn't usurp a big chunk of their market since it isn't even a decision between buy this or buy that, but buy that or just use the thing already in my pocket.
  - ladberg 5y ago
    I assume Square makes vastly more on fees than on hardware, so the opportunity to make fees off more merchants who have a smaller barrier to entry is probably beneficial, even if they don't buy hardware.
    - iamacyborg 5y ago
      Fees are definitely where the money is made in the payments sector, however, most proper terminals are leased so that represents a fairly large source of revenue for merchant service providers. A company I worked for were leasing terminals starting at £20 a month, and then took a cut of transactions plus a whole host of other bolt-ons like PCI non-compliance fees (which is it’s own racket, they’re not incentivised to ensure merchants are PCI compliant because it’s a significant revenue stream).
  - siver_john 5y ago
    Anyone who is going to be buying PoS from Square at a rate greater than just the phone attachment reader, this won't be sufficient for. Using a phone for a business you personally run is fine, using a phone as the central point of your business for even a relatively small fast casual is going to be a nightmare. And for those even on Square Apple's ipads are still the preferred choice as far as I can tell. So there isn't much of a benefit other than fees. For anything larger than a small fast casual you quickly run into greater integration needs with things like KDS (of which a few do use tablets, Toast, Fresh, etc, and even then I think ipads are preferred. I know Square integrates with a few of those as well as NorthStar so, I don't think they may have much to fear other than at the low end mom and pop stores.
    - 5y ago
- TheKarateKid 5y ago
  They're playing the long game. Apple wants market usage to build bargaining power with the banks. They saw how the original Google Wallet was blocked from adoption because of control by the carriers and banks. Remember ISIS Mobile Wallet? (That name aged terribly..) We saw how it took 10+ years and a dominating market position for Apple to show their claws with controlling 3rd parties with the App Store. Make no doubt that once a significant portion of the market uses Apple hardware or services for transactions, that they will want control and a cut of the transaction. Notice how they say: partner-enabled iOS app This means Apple has to endorse each 3rd party, and they remain under Apple's control just like app developers.
  - Angostura 5y ago
    > We saw how it took 10+ years and a dominating market position for Apple to show their claws with controlling 3rd parties with the App Store. M Really? I thought Apple's position was fairly consistent and it took 10+ years for the companies using the App Store to get antsy.
    - tl 5y ago
      That's a fairly revisionist view of history. Large partners had earlier had special pricing (ex: Netflix) lax enforcement of rules (ex: Facebook). Blowups where Apple presumed the right to levy a fee are also well known (Amazon book sales, Uber fares). The smaller fish got consistently screwed and no one was happy per se, but the sheer stupidity of Apple's recent actions do not help matters. For example, the app store cut is 30% unless you beg for scraps as a small business at which point you can get 15% until you start making $1 million. Income cliffs aren't how real taxes work (let's be clear here: Apple is pretending to be the government with taxes and fees and shadow court system of app review), they're just how Reagan demonized them back in the day.
      - Angostura 5y ago
        Fair point about the previous inconsistent enforcement. Thanks
      - 5y ago
- toddh 5y ago
  I think on the vendor side it's a lot harder than it looks. This isn't the kind of thing Apple is good at.
- alwillis 5y ago
  I am surprised Apple didn't make this a closed system and compete with Square for small businesses. Apple isn't Microsoft. When was the last time Apple created something consumer facing from scratch instead of using industry standards or market leaders if they exist? They generally don't explicitly compete with commodity businesses unless there's something unique they're attempting to accomplish. They do stuff just because they can. They partnered with the banks to create Apple Pay. They partnered with Goldman Sachs and MasterCard to create the Apple credit card. Besides, it would be a huge undertaking to build out a payment platform like Square to compete with them. Of course they could have bought any number of payment processors if they wanted to if they wanted to go that route. Stripe and Shopify already have millions of customers so it only makes sense to partner with them. The obvious thing most people on this thread is this being the basis for Apple's cryptocurrency aspirations. Tim Cook owns some and he said Apple as a company is looking into cryptocurrency [1]. It only makes sense that Apple will eventually support bitcoin and other transactions natively on the iPhone, peer to peer. [1]: "Tim Cook said Apple is looking at cryptocurrency – Here’s what the company is likely to do" https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-is-looking-at-cryptocurrency-heres-what-theyre-like-to-do/ https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-i...
  - 8note 5y ago
    The most obvious things are their cash cows: the iPhone and the app store. The M1 is also customer facing, vs partnering with Intel to make it
    - doctor_eval 5y ago
      Did they not partner with TSMC? IIRC, Apple wanted Intel to fab their silicon, but Intel refused. It’s only since Gelsiner took over that Intel is open to fabbing other designs.
  - rat9988 5y ago
    > When was the last time Apple created something consumer facing from scratch instead of using industry standards or market leaders if they exist? I'm too lazy to recall every detail, but it happened, often. Last exemple I have in mind is maps. As far as tech is concerned, I believe metal is their own inhouse invention?
- rswail 5y ago
  It's a closed system in that the applications that are installed in the Wallet require approval from Apple and that includes fees as does the provisioning of the existing EMV and other Wallet applications (not the other Wallet uses like passes etc).
dzhiurgis 5y ago
Not that we know of yet.
zumu 5y ago
They can always take a competitive stance later, once small businesses have gotten rid of all their PoS hardware. This makes that initial adoption much easier.
- bohemian99 5y ago
  I wonder if Apple would be wary of the regulatory attention that might attract.
- Crosseye_Jack 5y ago
  While it will reduce how often card readers will be used, card readers will be around for a while yet. In many markets contactless (atlest with real plastic) still has limits requiring the card holder to validate themselves (in the UK it’s a max of £100 per transaction and £200 over multiple transactions) and some card holders dislike contactless completely so have cards without it. So in those markets you will still need supporting hardware for the times you can’t accept contactless or risk losing the sale.
  - globalise83 5y ago
    True, but there is nothing to prevent completing biometric or PIN authentication on your own phone once you have tapped on the merchant's is there?
    - Crosseye_Jack 5y ago
      For me personally, I only use my real plastic when my battery is low on my phone. So you have to account for times may not have their phone with them. My bank allows for location based security. If my phone is not near the location the card is being used I then have to use chip and pin instead of contactless (dead battery, poor cell service, unable to get a decent location fix because of the building, all these can trigger the need to revalidate). And a lot of people still don’t have banking apps on their phone (one of the reasons banks had to support SMS 2FA when implementing Strong Customer Authentication). I’m not too sure if the banks/ Visa/MC would be too happy allowing users to enter their pins on the retailers phone as pin pads are supposed to be encrypted. We are seeing cards come with biometrics and pin pads on them, these cards will help with “card terminal less” transactions, but both bans will have to start issuing them and card users will have to be happy using them (I still know quite a few people who refuse to use contactless at all). So imo those BlueTooth card terminals will be with us for a while to come, they will just be used less, which is why imo Apple worked with partners who already have such terminals as a fall back for whenever contactless can’t be used.
WatchDog 5y ago
Presumably, in order to become an approved partner, you need to pay a kickback to apple.
- aembleton 5y ago
  And probably an NDA so that you can't reveal the kickback
- kazanins 5y ago
  Exactly! Same story as with Apple Pay: if you, as a card issuer, want your customers to use Apply Pay, you need to pay Apple. Running "software POS" on Android does not require any special "partnerships" with Google, as access to NFC is open.
ec109685 5y ago
Apple relies on payment processors for ApplePay as well, so this is normal.

kazanins 5y ago

Hey! Apple Card is also a partnership (with Goldman Sachs). Goldman is not in acquiring business, so Apple had to find another partner

artursapek 5y ago

They probably don't want any more anti-competitive criticism right now.

monkeynotes 5y ago

I am surprised Apple didn't make this a closed system and compete with Square for small businesses.

davnicwil 5y ago
Think it depends on the lens you view this with. If it's iphones have reached saturation with small business owners, let's build a business on top of that already dug and locked in moat, then perhaps. If it's offering this feature is a driver for more small business owners buying and sticking with iphones and the accompanying ecosystem, you can see how it's perhaps the smarter play to be an open platform here.
- btown 5y ago
  Right - the last thing Apple wants is to let Google take the high ground of "only our platform makes this business-critical API available to multiple apps, therefore if you're a small business owner you need to choose Android."
sn1de 5y ago
It competes with anyone selling point of sale hardware. I think Square falls into that camp, no? I wouldn't want to be in that space right now. I don't see how this doesn't usurp a big chunk of their market since it isn't even a decision between buy this or buy that, but buy that or just use the thing already in my pocket.
- ladberg 5y ago
  I assume Square makes vastly more on fees than on hardware, so the opportunity to make fees off more merchants who have a smaller barrier to entry is probably beneficial, even if they don't buy hardware.
  - iamacyborg 5y ago
    Fees are definitely where the money is made in the payments sector, however, most proper terminals are leased so that represents a fairly large source of revenue for merchant service providers. A company I worked for were leasing terminals starting at £20 a month, and then took a cut of transactions plus a whole host of other bolt-ons like PCI non-compliance fees (which is it’s own racket, they’re not incentivised to ensure merchants are PCI compliant because it’s a significant revenue stream).
- siver_john 5y ago
  Anyone who is going to be buying PoS from Square at a rate greater than just the phone attachment reader, this won't be sufficient for. Using a phone for a business you personally run is fine, using a phone as the central point of your business for even a relatively small fast casual is going to be a nightmare. And for those even on Square Apple's ipads are still the preferred choice as far as I can tell. So there isn't much of a benefit other than fees. For anything larger than a small fast casual you quickly run into greater integration needs with things like KDS (of which a few do use tablets, Toast, Fresh, etc, and even then I think ipads are preferred. I know Square integrates with a few of those as well as NorthStar so, I don't think they may have much to fear other than at the low end mom and pop stores.
  - 5y ago
TheKarateKid 5y ago
They're playing the long game. Apple wants market usage to build bargaining power with the banks. They saw how the original Google Wallet was blocked from adoption because of control by the carriers and banks. Remember ISIS Mobile Wallet? (That name aged terribly..) We saw how it took 10+ years and a dominating market position for Apple to show their claws with controlling 3rd parties with the App Store. Make no doubt that once a significant portion of the market uses Apple hardware or services for transactions, that they will want control and a cut of the transaction. Notice how they say: partner-enabled iOS app This means Apple has to endorse each 3rd party, and they remain under Apple's control just like app developers.
- Angostura 5y ago
  > We saw how it took 10+ years and a dominating market position for Apple to show their claws with controlling 3rd parties with the App Store. M Really? I thought Apple's position was fairly consistent and it took 10+ years for the companies using the App Store to get antsy.
  - tl 5y ago
    That's a fairly revisionist view of history. Large partners had earlier had special pricing (ex: Netflix) lax enforcement of rules (ex: Facebook). Blowups where Apple presumed the right to levy a fee are also well known (Amazon book sales, Uber fares). The smaller fish got consistently screwed and no one was happy per se, but the sheer stupidity of Apple's recent actions do not help matters. For example, the app store cut is 30% unless you beg for scraps as a small business at which point you can get 15% until you start making $1 million. Income cliffs aren't how real taxes work (let's be clear here: Apple is pretending to be the government with taxes and fees and shadow court system of app review), they're just how Reagan demonized them back in the day.
    - Angostura 5y ago
      Fair point about the previous inconsistent enforcement. Thanks
    - 5y ago
toddh 5y ago
I think on the vendor side it's a lot harder than it looks. This isn't the kind of thing Apple is good at.
alwillis 5y ago
I am surprised Apple didn't make this a closed system and compete with Square for small businesses. Apple isn't Microsoft. When was the last time Apple created something consumer facing from scratch instead of using industry standards or market leaders if they exist? They generally don't explicitly compete with commodity businesses unless there's something unique they're attempting to accomplish. They do stuff just because they can. They partnered with the banks to create Apple Pay. They partnered with Goldman Sachs and MasterCard to create the Apple credit card. Besides, it would be a huge undertaking to build out a payment platform like Square to compete with them. Of course they could have bought any number of payment processors if they wanted to if they wanted to go that route. Stripe and Shopify already have millions of customers so it only makes sense to partner with them. The obvious thing most people on this thread is this being the basis for Apple's cryptocurrency aspirations. Tim Cook owns some and he said Apple as a company is looking into cryptocurrency [1]. It only makes sense that Apple will eventually support bitcoin and other transactions natively on the iPhone, peer to peer. [1]: "Tim Cook said Apple is looking at cryptocurrency – Here’s what the company is likely to do" https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-is-looking-at-cryptocurrency-heres-what-theyre-like-to-do/ https://9to5mac.com/2021/12/28/comment-tim-cook-said-apple-i...
- 8note 5y ago
  The most obvious things are their cash cows: the iPhone and the app store. The M1 is also customer facing, vs partnering with Intel to make it
  - doctor_eval 5y ago
    Did they not partner with TSMC? IIRC, Apple wanted Intel to fab their silicon, but Intel refused. It’s only since Gelsiner took over that Intel is open to fabbing other designs.
- rat9988 5y ago
  > When was the last time Apple created something consumer facing from scratch instead of using industry standards or market leaders if they exist? I'm too lazy to recall every detail, but it happened, often. Last exemple I have in mind is maps. As far as tech is concerned, I believe metal is their own inhouse invention?
rswail 5y ago
It's a closed system in that the applications that are installed in the Wallet require approval from Apple and that includes fees as does the provisioning of the existing EMV and other Wallet applications (not the other Wallet uses like passes etc).

dzhiurgis 5y ago

Not that we know of yet.

zumu 5y ago

They can always take a competitive stance later, once small businesses have gotten rid of all their PoS hardware. This makes that initial adoption much easier.

bohemian99 5y ago
I wonder if Apple would be wary of the regulatory attention that might attract.
Crosseye_Jack 5y ago
While it will reduce how often card readers will be used, card readers will be around for a while yet. In many markets contactless (atlest with real plastic) still has limits requiring the card holder to validate themselves (in the UK it’s a max of £100 per transaction and £200 over multiple transactions) and some card holders dislike contactless completely so have cards without it. So in those markets you will still need supporting hardware for the times you can’t accept contactless or risk losing the sale.
- globalise83 5y ago
  True, but there is nothing to prevent completing biometric or PIN authentication on your own phone once you have tapped on the merchant's is there?
  - Crosseye_Jack 5y ago
    For me personally, I only use my real plastic when my battery is low on my phone. So you have to account for times may not have their phone with them. My bank allows for location based security. If my phone is not near the location the card is being used I then have to use chip and pin instead of contactless (dead battery, poor cell service, unable to get a decent location fix because of the building, all these can trigger the need to revalidate). And a lot of people still don’t have banking apps on their phone (one of the reasons banks had to support SMS 2FA when implementing Strong Customer Authentication). I’m not too sure if the banks/ Visa/MC would be too happy allowing users to enter their pins on the retailers phone as pin pads are supposed to be encrypted. We are seeing cards come with biometrics and pin pads on them, these cards will help with “card terminal less” transactions, but both bans will have to start issuing them and card users will have to be happy using them (I still know quite a few people who refuse to use contactless at all). So imo those BlueTooth card terminals will be with us for a while to come, they will just be used less, which is why imo Apple worked with partners who already have such terminals as a fall back for whenever contactless can’t be used.

WatchDog 5y ago

Presumably, in order to become an approved partner, you need to pay a kickback to apple.

aembleton 5y ago
And probably an NDA so that you can't reveal the kickback
kazanins 5y ago
Exactly! Same story as with Apple Pay: if you, as a card issuer, want your customers to use Apply Pay, you need to pay Apple. Running "software POS" on Android does not require any special "partnerships" with Google, as access to NFC is open.

ec109685 5y ago

Apple relies on payment processors for ApplePay as well, so this is normal.