Shares of Apple (AAPL 0.68%) climbed 1.9% on Tuesday after it announced a new way for merchants to accept payments.
Tap to Pay on iPhone will enable people to buy items easily and securely in the U.S. by simply tapping their phones with that of another iPhone user. The feature will be powered by NFC technology and will connect with Apple's popular mobile payment service, Apple Pay.
Apple will partner with payment processors like Stripe and e-commerce platforms like Shopify to make the service widely available. It will also work with contactless credit cards issued by Visa, Mastercard, Discover, and American Express, among others.
Notably, no additional hardware is required to accept payments through Tap to Pay on iPhone. That could give it a decided edge over other payment systems that require additional devices.
"In collaboration with payment platforms, app developers, and payment networks, we're making it easier than ever for businesses of all sizes -- from solopreneurs to large retailers -- to seamlessly accept contactless payments and continue to grow their business," Apple executive Jennifer Bailey said in a press release.
The move places Apple in more direct competition with Block (SQ 2.54%), the digital payments company formerly known as Square, which has long provided devices that allow merchants to accept credit and debit cards. If Apple's new service proves effective, those devices might no longer be needed by iPhone users in the U.S.