Square has announced its partnership with Apple Pay at the WWDC15. The new Square “Contactless + Chip Reader” will be able to take payments from Apple Pay via NFC and credit cards via its EMV chip reader. Although it can scan EMV chips, the new reader is unable to read magnetic card swipes. To combat this, Square announced that it will be shipping traditional magnetic stripe reader with the new Apple Pay/EMV chip reader, ensuring that merchants can accept a variety of payment methods.
This looks to be a profitable move for Square, as it will be taking a 2.75% fee from Apple Pay payments. (That fee remains unchanged, compared to Square’s other payment processing fees.) As Square helps to push the mass adoption of Apple Pay, it
Aside from the standard transaction fee, the new reader is basically free. The device will run $49 USD, but merchants will be eligible for $49 credit in transaction fees, negating the cost of the device.
Square’s new reader doesn’t need to be plugged at all to function. It can be used on-the-go as it has an internal re-chargeable battery, and it can connect with smart devices wirelessly. The reader is also compatible with the Square Stand USB hub and will ship to merchants in the fall.
This partnership benefits Apple as well. By using Square to get NFC readers into the wild stands to increase Apple Pay’s market presence. Square’s slick, user-friendly interface could make it a popular choice among small businesses looking to start accepting mobile payments.
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