Block (SQ), PayPal (PYPL), Marqeta (MQ) Visa (V), and other payment companies’ shares fell on Wednesday afternoon after Bloomberg reported Apple (AAPL) is working on a plan dubbed “Breakout” aimed at bringing financial services in-house.
The report states the tech giant is building payment processing technology and infrastructure as part of an effort to decrease its dependence on outside partners. The strategy is aimed at future financial products instead of existing ones.
Shares of Block, formally known as Square, fell by more than 4% an hour before the closing bell on Wednesday. PayPal shares were down about 2%. Visa and Global Payments (GNP) were also lower.
The reported plan would expand Apple’s pretense into the financial services industry. The Cupertino, California–based company has been growing its services business.
The tech giant already offers an Apple Card in connection with Goldman Sachs. It also runs Apple Pay and a peer-to-peer payment service. Apple Pay is available in around 70 countries, while the Apple Card and the company’s peer-to-peer payment features are only accessible in the U.S.
Fintech companies have been volatile along with the broader markets over the past several months amid higher interest rates and rising inflation. Marqeta (MQ) is down 38% since the beginning of January. Affirm (AFRM) is down 53% year-to-date, while PayPal is down 37% since the start of the year.