Apple is creating a new service that will let small companies accept payments directly on their iPhones without the need for additional hardware such as Block Inc’s Square terminals.
According to Bloomberg, the new feature turns the iPhone into a payment terminal and will allow shops to receive payments by tapping a credit card or another iPhone against the rear of their device.
Block shares sank 3.6 percent to US$106.98 (A$150.96) in early Thursday trade.
Apple has been working on the new feature since 2020 when it bought around US$100 million for Canadian firm Mobeewave, which enables devices to take payments with the tap of a credit card.
According to the source, the system would most likely employ the iPhones near field communications chip, which is now used for Apple Pay.
“This basically allows Apple to avoid releasing new hardware because a large number of customers already carry it (iPhones) in their pockets,” Edward Jones analyst Logan Purk explained.
Purk, on the other hand, warned that until Apple can provide a lower-cost product and an easier platform, some company owners may be hesitant to move.
Square presently charges $299 for their gadget as well as a fee of 2.6 percent plus 10 cents for every transaction.
If Apple restricts its new service to its applications or payments system, it will circumvent Square’s services, which are frequently utilized by small companies.
It may also have an impact on other POS machine manufacturers such as Verifone and Ingenico.
Apple did not respond to the report.
The corporation has been expanding its fintech offerings. In 2019, it partnered with Goldman Sachs to establish its own credit card, and it is apparently working on a “buy now, pay later” programme.
