Square built its name on a clean little white reader that plugged into an iPhone. Now the company is testing something that removes the reader from the equation entirely. Square is among a small group of sellers trying out Apple's new Apple Pay on iPhone technology, which uses the phone's NFC reader to take contactless card and wallet payments.
That sounds like a minor tweak. It is not. It reshapes who can set up a checkout in minutes, and what "card reader" even means for a tiny business.
The short version:
- Square is part of a small group testing Apple's Apple Pay on iPhone technology.
- The feature uses the iPhone's built-in NFC reader to accept contactless credit and debit payments.
- No external card reader is required for the contactless flow.
- Support includes cash, card, contactless, check, Cash App, invoices, payment links, QR codes, gift cards, and loyalty points.
- A free Square account is enough to start.
What Apple Pay on iPhone actually does
In the Square app, a seller picks the Apple Pay on iPhone option at checkout. The app uses Apple's new API to activate the phone's NFC reader. An Apple Pay icon appears at the top of the screen, the interface shifts to a pairing-style background, and the buyer taps their card or phone to pay.
No reader. No extra hardware. The iPhone is the terminal.
Why this matters more than it sounds
Small businesses have lived with awkward, outdated payment hardware for years. Square's hardware was already a step up—clean design, easy pairing, rechargeable Bluetooth readers, and full POS setups that mounted an iPad. Stripping the reader out of the contactless flow drops the cost of starting a checkout to zero, as long as the seller already has an iPhone.
That changes the math for very small sellers. A weekend farmer's market stall, a garage sale, a pop-up at a friend's event—none of them need to buy or carry a reader to take a tap payment.
The limits worth knowing
Two caveats matter. First, this is a beta, so it is not yet a default option for every Square account. Second, the contactless-only flow does not help sellers who still take chip cards, magstripe, or cash. A reader is still recommended for customers who pay the old-fashioned way.
The other thing to watch is the supported payment mix. Square lists cash, card, contactless, check, Cash App, invoices, payment links, QR codes, gift cards, and loyalty points. Losing any of those by accident would be a real hit for sellers who depend on them.
Our analysis
Square has always been at its best when it removes a step that felt like work. Free signup, no contract, an app that sets up in minutes. Apple Pay on iPhone extends that philosophy straight into the hardware layer.
The beneficiaries are obvious: micro-sellers, side hustlers, and small retailers who already own an iPhone. The losers are third-party reader makers whose value proposition just shrank. Big retailers with full POS systems are unaffected; they already have hardware that does far more.
Who should care:
- Micro-sellers and casual vendors** — Garage sales, farmers markets, craft fairs. If you already have an iPhone, your startup cost just dropped to zero.
- Small retail shops** — Useful as a fast lane for contactless payments, but not a replacement for full POS hardware.
- Reader hardware makers** — Losing relevance for the smallest sellers, unless they pivot to chip/magstripe backup markets.
- Large retailers** — Unaffected. This is not aimed at them.
What to watch next: when Apple opens the API beyond the small beta group, expect every major payment app to add a tap-to-pay flow within months. Also watch how Square handles backup payment types inside the same session—that is where the real product polish will show.
Bottom line: this is a quiet beta with loud consequences. If you sell anything in person and own an iPhone, keep an eye on your Square app for the update.
Key takeaways
- Square is testing Apple Pay on iPhone, turning the iPhone into a contactless card reader.
- Setup is free and requires no extra hardware for the contactless flow.
- A backup reader is still recommended for chip, magstripe, and cash sales.
- The feature is in beta; wider rollout will depend on Apple's API availability.
Frequently asked questions
Do I need a card reader to accept tap payments with Square now?
For the contactless flow using Apple Pay on iPhone, no external reader is required. A backup reader is still recommended for non-contactless payments.
Is Apple Pay on iPhone available to all Square users?
Not yet. Square is part of a small group of sellers testing the feature, so it is currently in beta.
What payment types does Square support?
The platform lists cash, card, contactless, check, Cash App, invoices, payment links, QR codes, gift cards, and loyalty points.
How much does it cost to set up Square?
Anyone can create a Square account for free, with no upfront cost.
Will this replace Square's existing card readers?
No. The feature adds a contactless-only option that uses the iPhone's NFC reader. Square's Bluetooth and standalone readers remain useful for chip, magstripe, and cash sales.