Apple Teams Up With Mobile Payment Reader

By Kat Asharya | Mon Apr 18, 2011 12:18 pm

Apple has started selling Square payment readers in their retail stores this weekend, one of the first concrete steps that the company has taken in the emerging mobile payment field.

The Cupertino, Calif.-based company's retail and online stores started carrying Square credit card readers this week. Square confirmed that it is the only payment device in Apple's stores and will be coordinating with Apple on in-store seminars on using the machine.

Square offers a small handset device that attaches to the iPhone and iPod Touch, letting merchants swipe credit cards, as well as an app to process and manage credit card transactions.

The partnership with Square is one of Apple's first real moves in the emerging mobile payments market, where e-wallet technology spreads the use of mobile devices in on-site financial transactions. The company had been rumored to consider adding near-field communications, or NFC, chips to its iPhone 5, but was reportedly waiting for industry standards for the technology.

But teaming up with Square is not surprising -- Apple's CEO Steve Jobs recently showcased Square's technology at the iPad 2's launch and the credit card reader was featured in the iPad "Year One" video, demonstrating how the Square device could replace traditional payment terminals.

Apple's choice of Square as its de facto mobile payment solution so far differentiates it from its rivals' own efforts in digital wallet technology, which have focused more on NFC technology.

Google recently extended its mobile payment trials in four cities to let users check-in to stores with an NFC-enabled phone and special "smart" store window stickers, bring up information and offers for consumers. Google likely has a much broader plan to create an NFC-powered mobile payments system and is already reportedly working with MasterCard and Citigroup on it.

Other companies are also investigating mobile payments. Three national carriers have formed a consortium to roll out their own solution and Visa is working with several banks on its own system.

But the boost from Apple is a sign that Square's solution may have legs. Square has been growing tremendously, handling over $1 million in payments per day and 100,000 new sellers per month. Its appearance on the Apple sales floor should be a significant boost in its profile.

The reader costs $10 and includes $10 of Square credit to handle the first few transactions. The app is free.

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