TD Bank is targeting microbusiness payments with the launch of its Tap to Pay solution that helps turn iPhones into point-of-sale machines. 

The solution will be rolled out across the U.S. and will target businesses with an annual revenue of less than $100,000 to provide an inexpensive point of service, according to a release from the $1.9 trillion bank.

Nearly 96% of all businesses in America qualify as micro and small businesses, according to a December report by Associate for Enterprise Opportunity, a trade group for entrepreneurs. 

“This is offered to TD Bank business banking customers and so we do require the client to have a checking account with us,” Jo Jagadish, head of corporate products and services, told Bank Automation News. “Once you open the TD mobile banking app, you can see the prompt for Tap to Pay on iPhone. It’s a very seamless, three-step process to be able to enroll.” 

Apple launched Tap to Pay functionality on its iPhones nearly two years ago, which streamlined the payment acceptance process without needing to attach a card swiping dongle to the device, Jagadish said. 

By eliminating that piece of hardware and being able to accept contactless payments on the phone, micro businesses don’t need to invest in a POS system, Jagadish said. 

Consumers spent $199 billion at stores in the U.S. using Apple Pay in 2022, up 118% year over year. In April 2023, an estimated 55.8 million U.S. consumers made an in-store payment using Apple Pay, roughly half of iOS users in the country. 

Nearly 33% of microbusiness owners in the U.S. struggle with accepting payments due to not having the necessary payment device or hardware, according to TD. 

With TD’s new solution, customers can accept contactless payments with next to no investment in hardware by paying a standard industry fee of 2.75% of each transaction, Jagadish said. 

The company is considering whether to launch the solution for Android users as well, but no timeline has been set for that, Jagadish added. 

FIs launching iPhone Tap to Pay 

Visa, Mastercard, and JPMorgan all provide Tap to Pay functionality for iPhones. 

JPMorgan has built in the payment-acceptance features on iPhones through its mobile banking app; Visa has allowed merchants to process payments through its Tap to Phone payment app for payment acceptance, according to the company’s website. 

There are expected to be 61 million mobile POS users globally by 2028, a 638% increase from 2023; this change is largely attributed to the launch of Apple Tap to Pay in 2022, according to a Jan. 9 report by think tank Juniper Research. 

In July 2020, Apple paid $100 million for Canadian fintech Mobeewave, which developed technology that allows any mobile app to accept in-person payments without extra hardware, according to Crunchbase.

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