Jack Dorsey, CEO of Square, says that Apple’s new mobile payments system does not pose a threat to his company because both products are different.
At the opening of the company’s new Canadian office in Kitchener, Ontario on Wednesday Dorsey said:
“It’s not a threat because … we don’t build a credit card, we don’t build a payment device at all. They’re building something that allows a credit card to be used in another place, but they’re not building a terminal. We are a terminal, we a register and we accept payments, so there’s no threat, there’s no competition there at all.”
Apple Pay uses the Touch ID fingerprint sensor, a new “Secure Element” feature, and the built-in NFC chip on the new iPhone 6 and iPhone 6 Plus, in conjunction with a credit card stored on iTunes.
Dorsey offers his opinion on NFC:
“NFC is not new technology. It really hasn’t taken off because there hasn’t a huge consumer demand for it. We think Apple may change that.”
Square’s card reader uses an iOS or Android device to accept mobile payments with a customer using a physical credit card. Currently Square charges retailers 2.75 percent of the value of each purchase. Apple is rumoured to charge retailers $0.15 per $100 transaction when customers use Apple Pay.
Last week it was reported that Apple was in talks to acquire Square for $3 billion. Jim Dalrymple from The Loop has given one of his famous “Nope” responses to the Apple-Square acquisition rumours. Dalrymple is suggesting that the two companies were never in talks about a possible acquisition.
Apple Pay will be available in the U.S. starting in October and will be compatible with Visa, MasterCard, American Express, and a few other partners. The company will also launch a new Apple Pay API which will allow developers to integrate the new mobile payments system into their own applications.
At launch, Apple claims that their new payment system will work at over 220,000 retails stores within the United States, including Nike, Macy’s, and Walgreens. The company says it is working “very hard” to expand the payments system to other countries.