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Visa gobbles up 10 percent of Square’s stock, now second-largest shareholder

According to a regulatory filing, Visa now has a 10 percent stake in Square Inc. making it the second-largest shareholder of the mobile payment startup.

What makes this news interesting is the fact that Visa started a rival service that could hurt Square’s market share in the future.

Related: You can now use Visa Checkout for online purchases at Walmart and Starbucks

Square makes it easy for smaller merchants to accept credit cards (chip or magstripe) and NFC payments like Apply Pay and Android Pay, on the go using a mobile device or at a counter using a dedicated reader.

Visa, on the other hand, recently announced Visa Explorer, which will be showcased later this month at Mobile World Congress. Visa Explorer is not a service, per se — it’s a developer platform for software developers to incorporate digital payments in their apps. It consists of a Web portal, developer tools, and a set of APIs.

At MWC 2016, Visa will show off new methods for mobile payments. These include the use of wristbands, keychains, stickers, and connected cards. The company will also showcase how biometric authentication will play a role in these payments. According to Visa, users will be able to pay with a simple wave of a hand.

Square, led by CEO Jack Dorsey, continues to be a leader for mobile payments, going public last November. Visa, a kingpin when it comes to credit cards, could be hedging its own mobile payment plans with this stake in Square.

Related: Square now accepts Apple Pay and Android Pay in 100 local businesses and counting

Square debuted at $9 per share, but closed at $8.62 yesterday. Shares jumped 14 percent to $9.84 in pre-market trading. Visa, on the other hand, rose 1.3 percent to $69.35.