Block Inc (NASDAQ: SQ) will soon enable Apple Inc's (NASDAQ: AAPL) contactless payment acceptance feature, 'tap-to-pay' on the iPhone, within Square's point-of-sale app.
What Happened: Block said the new offering would allow sellers to “seamlessly and securely” accept in-person contactless payments using only an iPhone and the Square POS app.
The Jack Dorsey-led company said the service will be launched later in 2022. It also announced an early access program for tap-to-pay on iPhone to allow select sellers to test the new technology.
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Why it Matters: Apple announced its tap-to-pay, a feature underpinned by near-field communications, in February. At the time, it was revealed that Block rival Stripe and Shopify Inc’s (NYSE: SHOP) Point would be the first to offer the feature.
Evercore ISI analyst David Togut said in a recent note that while Apple’s tap payment feature was considered a risk to Square’s micro-and mid-market merchant acquiring business, Square’s move has mitigated that risk.
Togut pointed out that Apple Pay is accepted at more than 90% of U.S. retailers, adding that Cupertino's push into electronic payments is expected to continue.
After tap-to-pay was introduced, Loup Fund analyst Gene Munster had said he was confident Apple was not competing with Square or other third-party payments but “essentially integrating with them.”
Price Action: On Thursday, Block shares spiked 6.8% to $87.48 in regular trading and gained 0.7% in the after-hours session. On the same day, Apple shares closed 1.7% higher at $151.21 in the regular session and rose 0.2% in extended trading, according to data from Benzinga Pro.
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