Apple is developing a feature that enables payments with the tap of a credit card, a move that could leave Square’s hardware behind in the dust.
According to a report from Bloomberg, this new feature will essentially make third-party iPhone contactless terminal accessories redundant.
By integrating tap-to-pay technology directly into the iPhone, small-medium enterprises would be able to accept payments without external hardware.
Square is currently dominating the external hardware payments space, so should Apple’s plans come to fruition, Square will be in a fight for its life.
Shares of Square (listed as Block) on the NASDAQ, have been viciously pummelled in recent months and this latest news could compound the company’s woes.
Currently, merchants have to utilise payment terminals that connect to iPhones via Bluetooth.
However, now the iPhone itself will be turned into a payment terminal.
Apple began working on this new feature around 2020 when it paid $US100 million ($A142 million) for Canadian start-up Mobeewave, which develops technology for smartphones to accept payments with the tap of a credit card.
Mark Gurman who unveiled this information for Bloomberg explained, “If Apple lets any app use the new technology, then Square can continue accepting payments via Apple devices without needing to worry about providing its own hardware.”
However, “If Apple requires merchants to use Apple Pay or its own payment processing system, that could compete directly with Square.”
