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Apple Tap to Pay: How much can it save small business owners?

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Apple's new Tap to Pay feature means businesses can now accept contactless card and mobile payments using an iPhone.

Launched today, the service is currently available through Westpac and Tyro Payments for businesses of any size.

"This new capability is particularly beneficial for any business that takes payments on the road or needs its staff to be more mobile on the shop floor," Westpac's chief executive of consumer and business banking, Chris de Bruin, said in a media statement about the launch.

Unlike most other business options for accepting card payments, there are no setup or hardware fees with Tap to Pay.

It's a game changer for tradies, delivery drivers, businesses like hairdressers, mechanics or florists and many more.”

Chris de Bruin, Westpac chief executive of consumer and business banking

Both Westpac and Tyro Payments offer a simple setup for Tap to Pay on iPhones:

  • Westpac: Get a business transaction account, apply for an EFTPOS Air merchant facility then download and set up the free app.
  • Tyro Payments: Apply for a Tyro BYO account then download and set up the Tyro BYO app.

How much does it cost?

Merchants or sellers will pay a 1.4% fee for Apple Tap to Pay transactions made through either Westpac or Tyro's platforms.

With Tyro, you get this rate if your monthly transaction volume is under $20,000. Custom rates apply above that amount.

It's a flat-rate price with Westpac.

The other benefit of Apple Tap to Pay is the lack of required hardware.

As an example, Square terminal readers can cost anything from $40 for the most basic mobile readers, through to $1,099 for fully-integrated point of sale systems.

How much can businesses save?

Based on transaction fees only, the 1.4% rate is one of the lowest on the market for businesses in Australia.

When we compared it to Square – another popular mobile payment service – we found the lowest rate it offered was 1.6% per transaction with a Square Terminal and Square Register, although these fees can be negotiated based on turnover.

Based on these costs, businesses would save $2 for every $1,000 worth of transactions with Apple's Tap to Pay.

As another example, Westpac's portable EFTPOS machine offers a 1.2% fee per transaction but also charges a $24.75 monthly terminal fee.

These combined costs mean that Tap to Pay is cheaper for businesses that make less than $25,000 in monthly transactions.

Above this amount, there are potential savings from the difference between 1.2% and 1.4% the fees per transaction.

But you may still have other costs, such as hardware fees, if you haven't yet invested in them.

These aren't the only options on the market, either. For example, CommBank now offers a Smart Mini payment device with a 1.1% fee per transaction and a one-off $59 fee for the hardware.

So it pays to compare different services to find a setup (and costs) that works for you.

What else do business owners need to know?

Tap to Pay is only available for business owners who have signed up to a service or app that supports it.

Right now, that's Westpac and Tyro.

But Apple has said it will be available through ANZ Worldline, Stripe, Till Payments and Zeller in the future.

Some other key details to keep in mind:

  • Westpac's Tap to Pay option accepts EFTPOS, Visa and Mastercard payments, as well as Apple Pay and "other digital wallets" (it does not list which ones).
  • Tyro's Tap to Pay option accepts EFTPOS, Visa, Mastercard, Apple Pay, Google Pay and Samsung Pay, as well as American Express.
  • Westpac offers same-day settlement into a Westpac business account (which is the only settlement option with Tap to Pay).
  • Tyro offers same-day settlement into a Tyro Bank Account (otherwise 1-2 business days with an account at a different bank).
  • You need to have an iPhone that's compatible with the payment app (ideally one you won't need for other tasks when taking payments), which is an iPhone XS or later running iOS 16.4 or later.
  • You can not use an iPad to process transactions with Apple Tap to Pay.

In the market for a new iPhone? Compare the latest offers on Finder. Or, check out other business merchant options now.

We updated this article on 18 May 2023 to include details about the CommBank Smart Mini as part of our cost comparisons.

Image: Getty Images

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