Tap To Pay: A Guide For Merchants

Tap to Pay is the first mobile processing solution that harnesses your smartphone’s technology to turn your phone into a credit card machine.

Tap to Pay uses your iPhone or Android’s built-in NFC antenna to accept contactless in-person payments. With Tap to Pay, you no longer need a mobile credit card reader to accept card-present payments on the go — you only need your phone.

Read on to learn more about Tap to Pay and how you can start using it at your small business.

What Is Tap To Pay?

Tap to Pay was introduced by Apple in 2022 for use on iPhone and expanded for use by Android in 2023. Tap to Pay harnesses the built-in NFC (Near Field Communication) capabilities of iPhone and Android smartphones to accept contactless (“tapped”) payments from a digital wallet like Apple Pay or a contactless credit card.

Tap to Pay is not offered by every payment processor or on every smartphone device (though all newer iPhones and most Androids are compatible). You will need to check with your payment processor to verify that this feature is available on your account, and whether it’s available for your phone.

Why Use Tap To Pay?

There are multiple benefits to using Tap to Pay:

• No Hardware Costs: Tap to Pay saves you the expense of buying a mobile card reader, which typically ranges from around $50 to $100.
• Instant Access To Processing: With Tap to Pay, you don’t have to wait for your credit card reader to come in the mail after you sign up. You can start taking in-person payments as soon as you’re approved for an account by a participating processor (provided that the processor offers same-day merchant accounts).
• Faster Payments: Tap to Pay is quicker and easier to use than messing with a card reader. You don’t have to wait for the Bluetooth reader to connect, and NFC payments in general are speedier than other types of transactions.
• Cheaper Processing: Unlike other types of mobile payments that don’t use a card reader — such as a QR code customers can scan to enter their own card info, or virtual terminal that lets you key in customer card info into your mobile browser — Tap to Pay is a type of card-present payment. This means that the transaction fees are, in most cases, no higher than what you’d pay if you were using a card reader.

How Does Tap To Pay Work?

Tap to Pay uses the NFC tech in your smartphone to accept NFC payments the same as you would an with external NFC-enabled payment terminal or mobile reader.

Tap to Pay works slightly differently depending on which mobile payment app you’re using (Square, Stripe, etc.) but essentially it will function nearly the same as taking any other contactless payment.

On Square, for example, you will tap “Charge” and then, if you have Tap to Pay enabled, you will see Tap to Pay as a payment option. Tap it and have the customer hold their card or NFC device close to the back of your phone. You’ll hear the familiar “ding!” that lets you know the transaction is complete.

Which Payment Forms Can I Accept?

You can generally accept any type of NFC payment with Tap to Pay. These include credit cards equipped with NFC, as well as digital wallet payments from a tapped phone or smartwatch.

However, there may be some limitations; for example, SumUp’s Tap to Pay for Android can’t currently accept Amex cards, and this includes contactless Amex cards.

Who Can Use Tap To Pay?

Any small business owner in the US, including freelancers, can use Tap to Pay to accept contactless payments on their phone, as long as their payment processor supports this feature.

Tap to Pay is also available in other countries, including Australia, Brazil, Canada, France, Germany, Italy, Japan, Netherlands, Taiwan, Ukraine, the United Kingdom, and others.

Which Providers Offer Tap To Pay?

At the time of writing, a growing list of payment service providers and merchant services providers offer Tap to Pay on their mobile POS apps. Some providers offering Tap to Pay include:

• Square (iPhone & Android)
• PayPal Zettle (iPhone & Android)
• Stripe (iPhone & Android)
• GoDaddy (iPhone & Android)
• SumUp (iPhone & Android)
• Adyen (iPhone & Android)
• Venmo (iPhone & Android)
• Shopify (iPhone only)
• Clover (iPhone only)
• Payanywhere (iPhone only)
• Chase (iPhone only)

If your provider doesn’t offer Tap to Pay, there’s a good chance they will in the near future. In the meantime, some business owners might consider using a free payment service provider such as Venmo to accept Tap to Pay payments, in addition to your regular merchant account you use for other payment types.

Which Devices Work With Tap To Pay?

iPhone XS and newer with iOS 15.5 and later can use Tap to Pay.

Tap to Pay is not available for iPad.

For Android users, there is a long list of devices that can potentially use Tap to Pay, but different payment service providers may have different requirements as far as devices and OS versions. For example, Venmo requires that your phone uses Android Oreo or later, whereas Square requires Android 9 or later.

How To Start Accepting Tap to Pay

Before you can use Tap to Pay, you will need to set up your phone to accept this payment type, both with your payment processor, and on your device itself. The exact setup steps will depend on your processor and device. But generally, setup is pretty straightforward and mostly a matter of enabling the feature in the settings on your device and on your POS app. Of course, you will also need a supported device and a payment processor that offers Tap to Pay.

If you don’t see “Tap to Pay” as a payment option on your device when you attempt to process a tapped transaction, there are probably additional steps you need to take to enable the feature on your account or your device. For example, you may need to update your iOS or your POS app to the latest version, or you may need to turn on location services for your device. Your payment service provider should have a list of requirements and activation steps for using Tap to Pay that you can refer to.

Tap To Pay Pricing

Tap to Pay pricing varies depending on your payment processing company.

Tap to Pay is a type of card-present payment and many providers price these transactions the same as any other card-present payment you take from a swiped or dipped (EMV chip) card. However, some providers charge an extra transaction fee for this type of payment.

For example, Stripe charges an extra $0.10 for Tap to Pay transactions, which is on top of the 2.7% + $0.05 it charges on all other card-present transactions. This brings Stripe’s total Tap to Pay fee to 2.7% + $0.15.

On the other hand, PayPal Zettle and Square do not charge an extra fee on Tap to Pay payments. PayPal Zettle charges 2.29% + $0.09 for all card-present payments, including Tap to Pay, while Square charges 2.6% + $0.10 for all card-present payments, including Tap to Pay.

Though some providers charge a little more to use Tap to Pay, I have not seen a provider that charges an additional monthly fee for Tap to Pay.

The Downsides Of Tap To Pay

Though Tap to Pay is a convenient way to take contactless mobile payments, it certainly has its downsides:

• Not Universally Available: As mentioned, not all payment processors offer Tap to Pay, nor is it available on all mobile devices or in all countries.
• Not All Customers Use NFC: Though nearly everyone has a smartphone these days, not everyone has their digital wallet in their phone configured to make contactless payments. Similarly, not everyone has a contactless credit card in the US; some smaller banks and credit unions don’t even offer them yet.
• Can’t Accept Swiped Or Chip Payments: Many customers still pay with their swipe and chip cards, in large part because many merchants still don’t have the tech to accept NFC payments. Since you can only accept NFC payments with Tap to Pay and not magstripe or chip cards, it probably isn’t a great idea to use Tap to Pay as your sole way of accepting payments.

Is Tap To Pay Safe?

Tap to Pay does have a few downsides, but a lack of safety is not one of them. While no form of electronic payment is 100% fraud-proof, Tap to Pay is just as safe as any other tapped NFC transaction, as long as your business follows the proper PCI DSS Compliance protocols.

In fact, Tap to Pay is in some ways safer than an NFC transaction that uses a credit card reader or terminal, since smartphones incorporate biometric user identity verification technology.

Also, because Tap to Pay is a card-present payment form, it’s safer than an eCommerce transaction or a credit card transaction that’s keyed in using a virtual terminal.

The Bottom Line On Tap To Pay

Tap To Pay isn’t a universal way for all small businesses to take payments, but it could be an interesting option for some merchants to add to their payment processing lineup.

Mobile companies that already use a mobile credit card reader can use Tap to Pay whenever a customer wants to pay with their contactless card or device, as can businesses that need a fast way to start taking payments on a new processing account before their card reader arrives in the mail. (Can’t you already see yourself asking customers, “Will it be cash or contactless?)

Since not all of your customers are ready to pay with contactless just yet, it’s a good idea for Tap to Pay merchants to have a backup payment reader. Check out our roundup of the best credit card readers for small businesses.