Apple announced on Tuesday that it will release a new Tap to Pay feature for iPhone that allows people to buy goods from merchants by tapping their phones together. It also works with contactless credit cards.
The announcement effectively turns iPhones into point-of-sale terminals without additional hardware. Block, whose first major product was a smartphone dongle that allowed merchants to accept credit card payments, dropped just over 2% in trading on Tuesday.
Apple said that Stripe would be the first payment operator to offer the service, and it would be integrated into Shopify’s point-of-sale product. Shopify stock was flat on Tuesday.
The service will use the iPhone’s NFC chip, and will also accept Apple Pay. It will accept Visa, American Express, Mastercard, and Discover.
The announcement is the latest move from Apple into the financial services industry. It currently operates Apple Pay, a contactless payment service, Apple Pay Cash, a peer-to-peer payments service, and Apple Card, an iPhone app-oriented credit card operated in conjunction with Goldman Sachs.
Apple reported $68.43 billion in services revenue for its fiscal 2021, which ended in September. Apple Pay and the Apple Card are components of its services segment.
Apple said the feature would be accessed through third-party apps, which will be released later this year. Other payment companies and app developers will be able to develop apps that access the tap-to-pay feature in a forthcoming version of iOS, the iPhone operating system.