Why NFC in the iPad Air 2 is a big deal for small businesses

The iPad Air 2 is starting to make its way into people’s homes (here are some early thoughts) — and as usual, iFixit took one and tore it down to its components. Inside there was one big surprise: An NFC Controller, model number NXP 65V10, which is the same chip that’s in the iPhone 6.

iPad Air chips, photo courtesy iFixit. Inside the little green box is the iPad NFC controller

iPad Air chips, photo courtesy iFixit. Inside the little green box is the iPad NFC controller

Apple hasn’t officially mentioned the new NFC chip in the iPad, and there doesn’t seem to be a use for it at the moment. Although the iPad Air 2 supports Apple Pay, it’s for online shopping — so you won’t see anyone tapping their 10-inch slate at a McDonald’s or Walgreens. Apple has declined to bring in-store Apple Pay to the iPad, although considering the newfound NFC chip it’s certainly theoretically possible. Using an iPad for mobile payment checkouts could even look sillier than using a tablet as a camera.

But I don’t think that’s why [company]Apple[/company] quietly stuck in a NFC chip in the iPad Air 2. One of the big drawbacks to Apple Pay at the moment is that it only works at big chain stores and restaurants. Although there are a lot of participating businesses — and more keep signing up — they’re still all corporate. There isn’t a way for a small business or maker to use Apple Pay yet.

A lot of small businesses use an iPad as a cash register. I got a cup of coffee yesterday from a coffee shop and swiped my card through a Square Register and signed on an iPad screen. iPads are already installed in stores.

square register

The key to NFC in the iPad Air 2 is that it affords the possibility of becoming an Apple Pay cash register with no dongle needed. Conceivably, it could expand the number of outlets that take Apple Pay from around 40 to anyone selling stuff who owns the latest iPad. It brings Apple Pay out from the big box store and into farmers’ markets and boutiques.

Apple Pay is still young, and Apple is still working out bugs — like the Bank of America double-payment issue people were encountering yesterday. It’s still looking like a trial program, and it’s obviously going to evolve as Apple, credit card companies and stores better understand how consumers want to use it.

I’m sure that developing NFC cash register software is not an easy task — Apple may even end up simply opening up access to the NFC chip in the future to third-party apps. But if Apple had the foresight to put an NFC chip in the iPad, at some point it’s going to be turned on.

Update: As a few commenters have pointed out, the NFC chip in the iPad doesn’t appear to have antennas, which would indicate that its primary function is likely as a secure enclave and not to enable payments.