Apple may grab the market share of Square, the payment terminal from the stable of Block Inc. It is coming up with a new service for the iPhones to enable small business houses to accept payments without connecting any hardware. The shares of Block dropped about 3.6 percent immediately after the news was reported by Bloomberg.
iPhone of a merchant can easily be turned into a payment terminal with the new feature and payments can be accepted from customers through their iPhones or with a tap of a credit card.
The iDevice giant has been developing the new payment terminal feature since 2020 after acquiring startup Mobeewave for $100 million. The Canadian company had the technology to accept payments through smartphones with just a tap of a credit card.
It is assumed the new feature may use the NFC chip of iPhones to enable payments without the need of attaching any hardware terminal. Currently, the NFC chip is being used for the Apple Pay service.
According to analysts, the new feature of Apple will bypass the hardware terminal as it is evident that a significant number of customers are carrying iPhones. However, it is to take care that the service is comparatively cheaper as well as easier to use. Some small business houses may immediately switch over to it.
The fee charged by Square is $2.6 for each transaction and the cost of its hardware terminal is $299.
Apple needs to take note of the transaction fee and make it cheaper than Square to make it popular and usable by many merchants. It may even affect some other POS machines including the same of Ingenico and Verifone in the long run.
Apple has been working on fintech services for a long. In 2019, it launched a credit card partnered with Goldman Sachs. It is active on the buy now and pay later service.