The emergence of contactless payments: J.P. Morgan now offers Tap to Pay on iPhone

J.P. Morgan Payments, a division of J.P. Morgan, has rolled out the Tap to Pay feature on iPhone for its merchant clients in the US, enabling them to accept contactless payments. 

Beauty retailer Sephora will be the firm’s first customer to use the new feature. “Sephora has a fantastic relationship with their customers and a proven record of providing an elevated shopping experience. Innovative payment solutions are an important part of delivering on that brand promise to consumers when they visit Sephora stores,” Jean-Marc Thienpont, head of omnichannel solutions at J.P. Morgan Payments, told Tearsheet.

The solution will turn the iPhone into a card reader, eliminating the need for merchants to deploy extra hardware to accept payments. Sephora’s Beauty Advisors can accept payments through contactless credit and debit cards, Apple Pay, and other digital wallets across the store by using their iPhones and Sephora’s mobile Point of Sale (POS) App.

The rise of Tap to Pay adoption

While contactless payments are available at points of sale around the world, it is only over the course of the last few years that the US has shifted its focus to Tap to Pay adoption. Tap to Pay came in the US in 2014 with the launch of mobile wallets but adoption remained nascent until 2018. The same year, Chase, the consumer banking division of JPMorgan Chase, announced to issue Visa cards with a contactless feature.

Payment and spending choices have evolved as consumer preferences have shifted, given the pandemic’s impact on consumer purchasing behavior. The tap feature simplifies and speeds up checkout lines, too. Mobile device-based tap-and-go transactions saw significant growth between 2020 and 2023 – nearly 80% of shoppers cited using contactless payments to complete a purchase, according to a Mastercard report.

“We’re seeing demand for Tap to Pay increase as consumer shopping behavior rapidly evolves. Over the past few years, through lockdowns and outbreaks, consumers became proficient in online shopping -- and the speed, security, and convenience it brings,” said Thienpont. “Shoppers are bringing the expectations for fast, simple transactions into the store. Therefore, technology like Tap to Pay will be critical for businesses to adopt to help, meet, and exceed those expectations.”

Tap to Pay technology and increasing consumer interest in this specific type of checkout experience are also propelling merchants toward Tap to Pay mobile payments. As a result, sellers at large are willing to re-evaluate their mobile payments strategies and provide more choices to consumers given they don’t have to purchase, manage, and connect additional card readers. Accepting contactless payments at the POS only requires a near-field communications (NFC) enabled terminal to allow customers to tap their cards and go. 

Merchants that accept digital wallet payments can potentially experience fewer chargeback losses, a lift in authorization rates, less cart abandonment, and a faster checkout experience – improving the customer experience overall.

To keep pace with adoption, other payments providers including Square also launched Tap to Pay on iPhone for US sellers, and on Android for sellers across the US, Australia, Ireland, France, Spain, and the United Kingdom. Stripe also rolled out Tap to Pay on Android this year, and most recently PayPal unveiled Tap to Pay – specifically aimed at SMBs – for Venmo and PayPal Zettle businesses in the US.

J.P. Morgan Payments: Responding to rising customer expectations

Banks are seemingly taking a systematic approach to come up with offerings and strategies that meet rising customer expectations, and subsequently help them maintain relevance and relationships, improving customer trust, engagement, and loyalty.

Last month, Citigroup launched its CitiDirect platform, situating its global products and services into a single platform to cater to the needs of its commercial clients. 

Analogously, J.P. Morgan Payments enabling Tap to Pay on iPhone is a part of the bank’s broader approach to creating a payments ecosystem that aligns with the evolving preferences of end users, and also serves the growing global needs of its merchant clients by simplifying omnichannel payments acceptance, according to Thienpont.

“Tap to Pay provides merchants a one-stop shop for everything they require for their job, from inventory to loyalty lookup, to now — accepting contactless payments all within their mobile devices,” he said. 

J.P. Morgan Payments plans to further expand the availability of Tap to Pay on iPhone to US merchants of all sizes, including small- and medium-sized businesses, in the coming year.