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Apple Pay: New Square Readers; Retailer Loyalty Programs Support; U.K. Expansion
June 8, 2015

By Jim Daly

Merchant processor Square Inc. is about to introduce a card reader that supports Apple Inc.’s Apple Pay mobile-payment service, Apple announced Monday. Apple Pay also will support retailers’ loyalty programs, according to Jennifer Bailey, Apple Inc.’s vice president of Internet services.

Image Credit: Apple Inc.
Square's NFC-compatible reader will be released this fall.

The announcements came at the start of Apple’s Worldwide Developers Conference in San Francisco. The widely-watched annual event is where Cupertino, Calif.-based Apple reveals its latest product announcements and hardware and software upgrades.

Bailey gave only a brief mention of the new Square reader, but the implication is that it will support near-field communication, Apple Pay’s communication technology for point-of-sale transactions on its latest iPhone models and the new Apple Watch.

“This fall Square will launch a gorgeous new reader,” said Bailey. The Square.com Web site will begin taking preorders today, and Apple’s retail stores will begin selling the readers this fall. A Square spokesperson did not respond to a Digital Transactions News request for comment.

Apple Pay will be accepted at more than 1 million merchant locations within a month, Apple says. The current tally is 700,000-plus locations. More than a quarter of those are vending machines.

In addition to the Square news, Bailey announced other Apple Pay developments that fill various holes in the mobile-payments service that launched last October. One of the biggest has been Apple Pay’s lack of support for retailers’ loyalty and rewards programs. Apple’s new iOS 9 mobile operating system, however, will be capable of supporting such programs, with the first coming from mid-priced department store chain Kohl’s, the Walgreens pharmacy giant, and the DDPerks program from Dunkin’ Brands.

In a related move, Bailey said Apple Pay will enable payment through private-label credit cards in addition to the general-purpose credit and debit cards from 2,500 issuers that already support the service. One of the first will be the JCPenney credit card issued by processor Synchrony Financial. Bailey also said Apple is renaming as Wallet its Passbook mobile application, the iPhone app into which Apple Pay users load credentials for their desired cards. The app will automatically detect if a purchase qualifies for points or rewards.

After Bailey’s presentation, Craig Federighi, Apple’s senior vice president of software engineering, said an upgrade to the Apple Maps app will show merchant locations that accept Apple Pay.

Bailey further said that both physical merchants and online companies continue to add Apple Pay’s so-called in-app functionality to their own mobile apps. Recent participants include the popular Pinterest site for displaying images, Delta Air Lines, and the Etsy online marketplace.

In another widely anticipated move, Bailey said Apple Pay is expanding into the United Kingdom. Eight major British financial institutions representing 70% of the country’s credit and debit cards will support the service at the outset. On the acceptance side, some 250,000 merchant locations will take Apple Pay, including the massive Transport for London subway and bus system.

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