In 2016, Apple brought NFC to the iPhone. As you may remember, this enabled iPhones to complete transactions by tapping them on compatible POS readers – a key piece of the Apple Pay puzzle. It then spent years forming partnerships with retailers and POS providers to achieve ubiquity.
Then came the next piece in the puzzle: accepting payments via NFC. Back in February, Apple activated its massive network of NFC chips to not only make payments but accept them. The practical result is that every iPhone is now a point of sale (POS), thus democratizing payment processing for SMBs.
Now Android is following suit, with the help of Stripe. Previously the first payment gateway to power Apple’s corresponding function, Stripe is now repeating that role in the Android universe. Specifically, any SMB that uses Stripe Terminal can now accept payments on an NFC-enabled Android device.
Stripe Terminal, for those unfamiliar, is the payment gateway service that powers point-of-sale payments for SMBs. Despite its title, it’s just software, bringing Stripe’s payment rails to a broad list of pervasive payment terminals that are embedded in brick & mortar locations… and now the good-old smartphone.
Depths of the SMB World
Going deeper into this integration, Stripe will be the first – and currently only – gateway that powers tap-to-pay on Android devices. We expect that list to grow so that Google can offer more optionality, and be competitive with Apple’s expanding list of payment gateways, including Venmo, Square and Paypal.
But in the meantime, Stripe alone is prolific enough to offer a meaningful level of optionality and coverage. Out of the gate, it already supports Google Pay, Mastercard, Visa, and American Express (debit and credit). More importantly, Stripe has strong channels into SMB merchant platforms.
For example, to reach into the depths of the SMB world, Stripe has integrated natively with merchant POS platforms that specialize in the unique needs of specific verticals. We’re talking Squire in the barbershop vertical, Oddle in the restaurant vertical, and Fareharbor in tourism to name a few.
And Stripe is motivated in all the above moves, as tap-to-pay transactions are a growing share of its payment processing volume. That share was up to 54 percent last year, while aggregate contactless transactions totaled $4.6 trillion last year, projected by Stripe to hit $10 billion by 2027.
SMBs and VSBs
Shifting to the SMB perspective, what this all means is that anyone with a smartphone has a de facto POS terminal. No Square readers… No Clover terminals… Just a phone. Though such hardware still has a place in retail, democratizing payments to anyone with a phone reaches a larger SMB or “VSB” base.
For example, very-small and highly-mobile businesses can accept payments easier. We’re talking about home services professionals that can process payments directly at the job site. There’s also a long tail of food trucks and farmers’ market merchants that conduct business outside of a traditional storefront.
What this essentially means is optionality. Mobile payments always had a steep adoption curve because they’re anchored in habit and security-bound comfort levels. For some SMBs wary of pixie-dust mobile payments through services like Venmo, a physical phone tap could engender tactile confidence.
Of course, as with all things SMB (and VSB), it could take a while for that confidence to evolve. But tap-to-pay is a tangible value proposition when it comes to technological tools, so it should resonate. Moreover, the pieces are in place now that the Android-carrying SMB world is invited to the party.
