Apple will soon turn iPhones into mobile payment terminals after the tech giant's recent acquisition of the startup, Mobeewave Inc. for $100 million.
Mobeewave partnered with Samsung Electronics in 2019 to test the technology on its phones while PitchBook also reported that Samsung's venture arm has also invested more than $20 million in the startup.
According to Bloomberg's sources, Apple brought the startup that developed technology that turns iPhones into mobile payment terminals. Mobeewave says its technology is a seamless way to accept credit card payments.
Cardholders just need to tap their credit card or a smartphone at the back of another phone to process a payment using an app from Mobeewave. The system does not require hardware beyond a Near Field Communications (NFC) chip, which has been included in iPhones since 2014.
"Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans," an Apple told Bloomberg confirming the deal. However, a reported $100 million price was not confirmed when Apple CEO Tim Cook stated its acquisition strategy in an interview with CNBC on Friday, July 31.
Cook said Apple's acquisition approach is different from other tech companies as Apple buys a company and incorporate its technology into the iPhone. The CEO also mentioned that he did not receive any questions on acquisition in the recent congress hearing.
Following Cook's statement, Apple could incorporate Mobeewave's technology into the iPhone or other Apple products in various ways. Apple can use it to compete with Square's point of sale system with Apple Play's service expansion. Also, Apple can integrate Mobeewave's technology in the Apple Card system and Apple Wallet app.
"Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans," an Apple spokesman told Bloomberg.
Apple has recently acquired the weather app Dark Sky, which is now the basis of new Weather app features in iOS 14 on iPhone. Also, Apple acquired virtual reality company NextVR, which provides VR experiences for watching live events. The tech giant also bought Voysis, Xnor.ai, and Inductiv to enhance Apple's artificial intelligence, including Siri, as well as enterprise device management company Fleetsmith.
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How to use the Moobeewave app?
According to its website, Moobeewave believes that payments "should be simple, frictionless and effortless" for both clients and merchants. Users can process credit card payments using the app in three easy steps:
Step one: Enter the transaction amount
Step two: Tap the client's credit card or smartphone onto the back of the device with active app
Step three: Process the payment using the mobile app
With this acquisition, Apple will be in more direct competition with Square Inc., which provides both payment hardware and software for smartphones and tablets.
Apple is said to retain dozens of Mobeewave employees after the deal. They will continue to work out of Montreal, according to sources who requested anonymity.