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The vision of turning mobile devices into tap-and-go POS terminals took a big step forward Thursday as MagicCube Inc. announced i-Accept Cloud, an open, cloud-based softPOS acceptance platform. i-Accept Cloud is expected to simplify the creation of new merchant payment acceptance and digital commerce solutions. By connecting the currently siloed parties in the payments’ acceptance chain—i.e., acquiring banks, payments-systems providers, and merchants—into a software-based cloud model not tied to legacy hardware or bound by a specific device maker, its operational system, or payment card network.
“[Software] is moving into the cloud, because it is easier to update, integrate, and certify,” says MagicCloud chief executive Sam Shawki. “We’re bring this part of the [payments] industry into the current century.”
Large acquirers and processors, such as Shift4 Payments Inc., which is making an undisclosed investment in MagicCube, can plug the i-Accept Cloud directly into their existing platform to create their own cloud-based solutions. A white-label version of the i-Accept Cloud app is also available for smaller players that lack the scale to create their own apps using the platform. I-Accept Cloud can run iOS and Android devices.
“Ours is a ready-to-scale solution,” Shawki says. “We are device-agnostic provided [the device maker] does not block us. We’re ready for the future.”
Shawki adds that the i-Accept Cloud platform is not a direct competitor to dongle-based acceptance solutions for mobile devices, such as Square. “We are an open ecosystem and expect to work with everybody in this space, that’s why we are device-agnostic,” says Shawki. “A company like Square is more interested in its merchant business than the technology around it. Who is likely to be at a disadvantage are traditional POS terminals makers.”
MagicCube’s launch of i-Accept Cloud comes as Apple Inc. is reportedly developing a contactless application that would enable iPhone users to accept cards without requiring a connected device, according to a report from Bloomberg. The application will likely use NFC technology similar to Apple Pay, according to the Bloomberg report. Apple has reportedly been moving toward development of contactless acceptance technology for the iPhone since its acquisition of the Canada-based technology firm Mobeewave Inc. in 2020.
One potential drawback for Apple is that the tech giant tends to operate in a closed ecosystem, some experts say. In other words, Apple’s software runs only on Apple devices. MagicCube’s entry could prompt Apple to rethink its strategy and open its software to devices that do not run its iOS operating system, some observers argue.
“MagicCube is the Android equivalent to Apple’s solution, so I would expect to see a lot of interest from other players for their solution fairly soon,” Thad Peterson, strategic advisor, retail banking and payments for Aite-Novarica Group, says by email.
Nevertheless, as Apple rolls out its contactless acceptance solution, it will pretty much guarantee increased interest in secure transactions on a smart phone and deliver scale, Peterson adds.
Shift4’s investment in MagicCube signals that the company has a ready-made, global ecosystem, Shawki says. Last October, MagicCube received a $15 million round from other investors.
Michael Isaacman, chief commercial officer at Shift4, said in a prepared statement that MagicCube’s cloud-based platform offers a unique approach to payment acceptance by removing the need for live devices, offering considerably more flexibility and other significant advantages over traditional hardware options.
“This is one of the reasons why we not only partnered with MagicCube to integrate our end-to-end payment solution with their offering, but also invested in the company’s latest funding round,” Isaacman says.
