Square Inc. tumbled as much as 12 percent in intraday trading Tuesday, erasing most of the gains made since its November initial public offering as the competitive landscape for small-business payments intensified.

Shares of the San Francisco-based company dropped to as low as $9.07, compared with the IPO price of $9 a share. They fell 8.4 percent to $9.41 as of 1:24 p.m. in New York, giving the mobile-payments processor a market value of about $3.1 billion.

The shares also dropped on Friday, after larger payments company First Data Corp. announced a new technology geared toward small businesses, which account for the majority of Square’s customers. Investors may be worried that First Data’s “Clover Go,” a credit-card reader that plugs into smartphones and is similar to Square’s flagship dongle, will affect Square’s market share, according to Gil Luria, an analyst at Wedbush Securities in Los Angeles.

The more crowded field also highlights Square’s dilemma of relying on a competitive payments revenue structure amid a high-cost expense structure as a software company, Luria said.

Amid broader equity market volatility -- the Standard & Poor’s 500 Index dropped 8 percent this year through Friday -- investors have also become increasingly wary of technology companies without a clear path to profitability. While Square has been trying to expand into new lines of business including marketing software and cash advances for its small business customers, it has yet to post a profit.

Analysts project that the company could post net income for the first time in the second quarter of 2017, according to the consensus of four estimates compiled by Bloomberg.

A spokeswoman for Square declined to comment.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE