Block’s shares fell 3.5% to $107.01 in early trading.
The new feature turns the iPhone itself into a payment terminal and will allow merchants to accept payments by approximating a credit card or another iPhone on the back of your device, Bloomberg reported, citing people with knowledge of the matter.
Apple declined to comment on the report.
If the iPhone maker keeps this service exclusive to its own apps or payment processing system, it would sideline Square’s services, which are widely used by small businesses to accept payments. It could also affect other POS machine manufacturers such as Verifone and Ingenico.
Apple has been working on the new feature since around 2020, according to the article, when it paid about $100 million for Mobeewave, a Canadian startup that developed technology for smartphones to accept payments by approximating a credit card.
The system will likely use the iPhone’s NFC chip that it currently uses for Apple Pay, according to the article, adding that the feature could be rolled out via a software update in the coming months.
The company has been beefing up its fintech services. Apple launched its own credit card with Goldman Sachs in 2019 and is reportedly working on a “buy and pay later” service. (Reporting by Akriti Sharma and Chavi Mehta in Bangalore; edited in Spanish by Benjamín Mejías Valencia)