Apple is reportedly working to launch a new service that will allow small businesses to accept payments on their iPhones without any additional hardware.

The move was reported by Bloomberg citing people familiar with the matter. The technology is expected to use iPhone’s near field communications (NFC) chip to enable the service.

The US tech giant has been working on this technology since 2020 after acquiring Canadian firm Mobeewave for $100m.

The Canadian firm has developed the technology to enable smartphones to accept credit card payments.

Currently, the merchants use a payment terminal that connects with the iPhone to accept payments through credit cards or another iPhone. 

However, it is still not clear if Apple will allow any app to use its new technology or restrict it to Apple Pay or its payment processing system. 

The latter would place Apple in direct competition with Block’s Square payment terminals, which is currently a leading player in the market. 

Bloomberg could not confirm if Apple will brand the new service as part of Apple Pay. The tech giant may partner with a payment network for the new service or launch its own.

The new feature is expected to be out through a software update in the coming months, the sources said. 

The first beta version of iOS 15.4 is also expected to be released soon and the final version can be launched as early as the spring.