Apple announced on Tuesday that it will release a new Tap to Pay feature for the iPhone that allows people to buy goods from merchants in the U.S. 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, fell 2% in early trading Tuesday.
The service, currently limited to the U.S., will use the iPhone’s NFC chip, and will also accept Apple Pay, Visa, American Express, Mastercard and Discover.
Tap to Pay is the Big Tech company’s latest financial services innovation. 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 the year ended in September; Apple Pay and the Apple Card are small components of that 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.