Apple Hints At Mobile Payments

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Apple (NASDAQ: AAPL  ) has, arguably, the world's most "sticky" mobile ecosystem. While this ecosystem has done very well to keep users from defecting to one of the various Android vendors, many investors see pretty substantial potential for Apple to enter the mobile payments business, which could serve to both widen its iOS ecosystem moat and to potentially add another potentially large source of revenue. 

It is also important for investors to really key in on the following from Tim Cook on the most recent earnings call:

The mobile payments area in general is one that we've been intrigued with, and that was one of the thoughts behind Touch ID. But we're not limiting ourselves just to that. So I don't have anything specific to announce today, but you can tell by looking at the demographics of our customers and the amount of commerce that goes through iOS devices versus the competition that it's a big opportunity on the platform.

Join Evan Niu, CFA and Fool contributor Ashraf Eassa as they dig deeper into Apple's potential to be a major mobile payments player.

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  • Report this Comment On January 29, 2014, at 9:34 PM, twolf2919 wrote:

    I am certainly intrigued by Apple getting into the mobile payment game, I have yet to see anyone explain how that will work!? Maybe some intrepid soul will enlighten me?

    I mean, all Apple really has are those fabled 500-700m accounts with credit card numbers. So, suppose Apple let you pay for an item at Macy's with your phone. Presumably Apple will simply charge your credit card with the amount of the item. I can see how the credit card is happy with that, but how does Apple make any money out of this? Will they try and finagle a "cut" from the card company for facilitating this transaction or will they charge the iPhone owner a "convenience fee"? I can't see either of these entities agreeing to it - the credit card company has zero incentive and the iPhone user doesn't really gain much over using a standard credit card - and even less over using a store-specific Passport payment card.

    So how will Apple make its money?

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Ashraf Eassa

Ashraf Eassa is a technology specialist with The Motley Fool. He writes mostly about technology stocks, but is especially interested in anything related to chips -- the semiconductor kind, that is. Follow him on Twitter:

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