According to people familiar with the topic, Apple Inc. is working on a new service that will allow small companies to accept payments directly on their iPhones without the need for any additional gear.

Since approximately 2020, when it paid around $100 million for a Canadian firm called Mobeewave, which developed technology for smartphones to accept payments with the tap of a credit card, the business has been working on the new feature. The technology will most likely use on the iPhone’s near-field communications (NFC) chip, which is already in use for Apple Pay.

Today, merchants must employ payment terminals that plug into the phone or communicate with it over Bluetooth in order to accept payments on an iPhone. Instead, the new feature would turn the iPhone into a payment terminal, allowing users like food trucks and hairstylists to receive purchases by tapping a credit card or another iPhone onto the device’s back.

Payments companies that rely on Apple’s iPhones to enable sales, such as Block Inc.’s Square, which dominates the industry, may be impacted by the decision. Square may continue to accept payments via Apple devices without having to worry about providing its own hardware if Apple allows any app to use the new technology. Apple might directly compete with Square if it forces shops to adopt Apple Pay or its own payment processing system. A request for comment from a Block spokesman was not immediately returned.

As the market started in New York on Thursday, Block’s stock was down 3.4 percent, while Apple was up 2.1 percent.

Although the team working on the functionality has been working within Apple’s payments business since being moved over from Mobeewave, it’s unclear whether the payment acceptance option will be marketed as part of Apple Pay. It’s also unclear whether Apple would cooperate with an existing payment network or go along with the feature.

According to the sources, Apple may begin rolling out the feature via a software update in the coming months. In the near future, Apple is scheduled to release the first beta version of iOS 15.4, with a final release for consumers expected in the spring. A spokesperson at Apple declined to comment.

According to Bloomberg News, Apple aims to release an iPhone SE and iPad Air with 5G as early as March or April, as well as a new Mac with an Apple proprietary chip.

In recent years, Apple has increased its focus on payments, establishing the Apple Card in the United States in 2019 and launching Apple product installment plans on the credit card later that year. Bloomberg News reported last year that Apple also offers the Apple Cash card for digital peer-to-peer payments and is working on a solution for Apple Pay that would allow users to buy products now and pay for them later in installments.

Mobeewave’s payment acceptance technology will not be exclusive to the iPhone. In 2019, Samsung, which sponsored the firm before it was sold to Apple, added credit card acceptance to its devices with a simple tap.

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