Apple Threatens Square's Payment Stronghold With iPhone's New Tap-to-Pay Feature Apple has reportedly been working on the new feature since around 2020, when the company spent $100 million to acquire Canadian startup Mobeewave.

Small businesses will soon be able to take advantage of a new iPhone feature that makes it possible to accept payments directly on the Apple device without any additional hardware, Bloomberg reports.

Apple has reportedly been working on the new feature since around 2020, when the company spent $100 million to acquire Canadian startup Mobeewave, the developer of a technology that allows phones to process payments with the tap of a credit card. It's likely the system will utilize the iPhone's near field communications (NFC) chip that currently supports Apple Pay.

Samsung, which backed Mobeewave in 2019, began using the startup's payment-acceptance technology prior to Apple's acquisition of it.

Related: Apple Pay Is More Popular Than Starbucks for U.S. Mobile Payments

Although services like Square require the use of an external hardware, with Mobeewave's technology, once users download an app and type in the amount they'd like to charge, customers can simply tap their credit cards against the device to pay. Apple declined Bloomberg's invitation to comment on whether this is how the technology will work with the iPhone's direct-payment acceptance.

It's also unclear how much the feature will rely on Apple Pay. If other payment-processing companies, like Block Inc.'s market-dominating Square, aren't allowed to tap into the service, Apple would become a major direct competitor. At this time, however, Apple hasn't announced whether it will launch the service solo or co-launch with an existing payment network.

Per Bloomberg's sources, Apple's new feature might be introduced via a software update in the coming months. A beta version of iOS 15.4 is expected soon, with a spring release likely for the final iteration.

Related: 4 Reasons Why Your App Should Jump on the Apple Pay Bandwagon