Apple Pay is coming to a food truck near you

apple pay lil burma
An employee at the Lil Burma food truck in San Francisco processes an Apple Pay smartwatch payment with the PayAnywhere device.

You can pay with a credit card at some unusual places these days: taco trucks, flea markets, baby sitters. Soon, smartphone and watch payments like Apple Pay and Google Wallet will also work outside of traditional retailers too.

Starting in September, PayAnywhere will become the first mobile payments gadget in the U.S. to take Apple Pay. The $39.95 device will plug into iPhones and iPads so food stalls, contractors, galleries and other atypical businesses can accept payments via Apple Pay.

PayAnywhere, made by North American Bancard, is aligning itself closely with Apple (AAPL). The dongle will only be available in the Apple Store and only work with iOS devices for now. In addition to Apple Pay, it will continue to accept credit card payments.

To demonstrate the new device, Apple's Jennifer Bailey, vice president of Apple Pay, picked up the tab for some reporters' lunches on Wednesday. Bailey waved her Apple Watch and an iPhone 6 in front of a PayAnywhere-equipped iPad at Lil Burma, a food truck in San Francisco.

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PayAnywhere is chunkier than the first generation of mobile card readers we're used to seeing. It's two inches by two inches and plugs into the audio jack on a smartphone or tablet.

New payment technology necessitates the larger size. The devices need to be wide enough to fit a sideways credit card, and the NFC antenna requires the bigger shell. New credit cards are starting to use chips, which need to slip into a reader and hang out there for a few seconds until the transaction is complete.

Competing products aren't far behind. Square has been the biggest player in the area, with it ubiquitous little white card reader that plugs into smartphones and tablets. It is coming out with its own NFC and card reader. Like the PayAnywhere device, it will be larger. However, Square says its new reader won't need to plug into a mobile device to work.

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