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- Block shares have slumped since listing on the ASX
- The sale of the technology weighed on its shares, as did rumors about Apple’s plans
- Apple could be about to disrupt the disruptor with its iPhones
It hasn’t been a good start to life in the Australian equity market for the Block Inc. (ASX: SQ2) share price.
After hitting $178.88 shortly after listing, shares of the payments company fell 17% to $149.27.
Why is Block’s stock price under pressure?
While much of the weakness in Block’s stock price was due to a sell-off in the tech sector on the prospect of interest rates rising sooner than expected, it’s not isn’t the only reason for the underperformance.
Shares of the company came under pressure this week amid reports that tech giant Apple may be set to challenge Square in the payment terminal market. This adds to existing speculation that Apple wants to launch a buy it now, pay later (BNPL) offering that would compete with the newly acquired Afterpay business.
What’s the latest?
According to Bloomberg, Apple is currently developing a new payment service that will allow iPhones to accept debit and credit cards without additional hardware. All of this technology requires an NFC chip, which has been present in iPhones since the iPhone 6. This is made possible by Apple’s acquisition of Canadian Mobeewave for around US$100 million in 2020.
This means that small business owners could accept payments from customers without the need for hardware like the Square Reader or EFTPOS machines from Tyro Payments Ltd (ASX:TYR).
What impact this ultimately has on Block’s performance, only time will tell. But judging by Block’s share price in recent days, investors seem to fear it could slow its terminal growth and gross payment volume if Apple starts gaining market share.
However, it should be remembered that Apple has not confirmed this technology or its BNPL aspirations.