Silicon Valley continues its foray into payments last week, with Apple buying Canadian start-up, Mobeewave for $100m. The company, based in Montreal, builds software that allows smartphones to become payment terminals without any additional hardware or accessories and includes huge Android handset manufacturer, Samsung as an earlier investor.
If rolled out, this would allow Apple to compete directly with companies like Square and i-Zettle by turning iPhones and iPads into card terminals out of the box and provide merchant-facing, Apple branded payment services to go alongside their consumer-facing products like Apple Card (issued by Goldman Sachs) and Apple Pay within the device. Of course, once an organisation is the provider for both ends of the transaction, it has a lot more control over how that transaction is processed, enabling the possibility of closed loop payments which do not necessarily move across traditional card networks. It also marks the first concrete sign that the “phone as a terminal” market is moving from the domain of niche innovation to the mainstream.
This remains a fascinating space to watch. It will be interesting to see who makes the next move, and whether banks and payment processors are content to be squeezed further down the value chain away from the merchants, the consumers and the data ownership.
By our payments advisor Nick Telford-Reed.