Apple Will Let Businesses Use iPhones to Take Customer Payments

With the feature, merchants would be able to accept payment from customers by having them hold their iPhone or Apple Watch near the merchant’s iPhone to pay with a digital wallet like Apple Pay or a contactless credit or debit card.

Payment processor Stripe Inc. will be the first platform to offer the feature this spring to its customers, which include Shopify’s SHOP 1.28% point-of-sale app, Apple said. Other payment platforms and apps will start offering the feature later this year, the company said.

“Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences,” said Apple’s vice president of Apple Pay and Apple Wallet Jennifer Bailey.

The new feature could cut into the business of companies like Block Inc., formerly Square Inc., which makes hardware for stores and businesses that allows them to accept contactless payment. Shares of Block fell about 1% in midday trading on Tuesday.

“Whether you’re a salesperson at an internet-first retailer or an individual entrepreneur, you can soon accept contactless payments on a device that’s already in your pocket: your iPhone,” said Stripe’s chief business officer Billy Alvarado.

Apple said that the company won’t be able to access what is being purchased or who is buying it. It said payment data is encrypted and protected by the same technology used for its Apple Pay.

Apple said the feature will work with credit and debit cards from various payment networks, including American Express, Discover, Mastercard, and Visa.

Write to Will Feuer at will.feuer@wsj.com