Square rolls out readers to accept Apple Pay

Edward C. Baig | USA TODAY

Show Caption Hide Caption How Apple Pay is stacking up against other mobile payments After checking out JetBlue's Apple Pay integration USA TODAY's Ed Baig gives an update on the state of mobile payments. Video by Eli Blumenthal

NEW YORK — Square is rolling out new mobile payment readers to 100 local businesses around the country, allowing such merchants to accept chip cards, and most notably, Apple Pay.

The move is a big deal for Square, which only last week went public. But it also adds momentum to Apple’s efforts to spread Apple Pay more broadly.

It has taken awhile for the new reader to get here. Square and Apple originally announced the new contactless reader back in June at Apple’s Worldwide Developer’s Conference.

By the afternoon on Monday, Square's (SQ) stock was at $12.21, down 4.98% from Friday's close.

Customers who want to take advantage of Apple Pay at participating Square merchants can wave their iPhones, or the Apple Watch, near the new reader, without making direct contact. Folks who use chip cards can insert their credit cards into the reader.

"Until now, technology like our new reader has been out of reach for local businesses," said Jesse Dorogusker, head of hardware at Square, told USA TODAY via email. "Now Square sellers across the country can quickly and easily accept the new forms of payment that are crossing their counter tops."

Josh Kulp, the owner and chef of Honey Butter Fried Chicken in Chicago, is one of the first businesses to get the new reader. It “has allowed us to get up to date with where the world has gone,” he says.

Adds Caroline Bell, owner of the New York City-based Café Grumpy coffee shops, which has also just added the new reader: “With Apple Pay it’s superfast and that was something people were really interested in us having.”

Merchants pay $49 for the latest Square reader. At Honey Butter Fried Chicken, an iPad is connected to a $99 Square Stand which transforms Apple's iPad into a point-of-sale terminal. But Square Stand is not required to let merchants accept the payments through the new reader.

According to Apple, Apple Pay is accepted in more than one million stores, including major retailers and restaurants like McDonald’s, Macy’s, ToysRUs, Walgreens and Whole Foods.

Apple Pay competition

But having such payments accepted at small and local businesses is critical to its success. Apple competes in the burgeoning mobile payments space against the Android Pay system that Google is pushing for Android devices, as well as the Samsung Pay system that works on compatible Samsung phones. In fact, both Android Pay and Samsung Pay are also compatible with Square's new reader.

And Samsung Pay claims one major advantage over the rival systems—in addition to working at NFC (Near field communication) type point-of-sale terminals, it works at many of the terminals that rely on older “magnetic stripe” technology.

What's more, on Monday, Samsung Pay added Chase Visa credit, debit and Liquid cards to its lineup,.

As for Apple Pay, Square is only one of the ways that merchants can accept such payments. The $39.95 PayAnywhere mobile credit card reader that North American Bancorp introduced in August is also compatible with the system.

At the Re/code Code/Mobile conference in October, Apple vice president for Apple Pay Jennifer Bailey said that earlier this year about 60,000 merchants per month were adding contactless terminals that are Apple Pay enabled, a figure that has since risen to about 100,000 small to medium-sized merchant locations every month.

And on Apple’s recent earnings call, the company cited double-digit growth for Apple Pay transactions since its Sept. 2014 launch.

Part of the challenge for local merchants that are adding the new Square reader is letting the public know that that they can pay using their phones or smart watches.

“Usually by the time you tell people you have Apple Pay they have their credit card out. Hopefully and assuming over time as it becomes more understood that we have the feature, people will use it more and more,” Kulp says.

Still, Kulp says he's started seeing customers using both their phones and the Apple Watch to pay for his chicken.

“People who have Apple Watches tend to be on the lookout for these things,” he says.



Email: ebaig@usatoday.com; Follow USA TODAY Personal Tech Columnist @edbaig on Twitter