Apple (AAPL -0.78%) recently announced that iPhone users would be able to accept credit card payments without any external hardware. In this Fool Live video clip, recorded on Jan. 27, Fool.com contributors Matt Frankel, Jason Hall, and Lou Whiteman discuss whether this could be a threat to fintech disruptors, particularly Block ((SQ 0.39%), formerly known as Square.
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Matt Frankel: Apple announced to help small businesses to accept payments directly on the iPhone without an external terminal. Could this turn into a potential partnership with Block, or Square, or is this a threat for them? I have a couple of thoughts on that. No. 1, this is not the first time Apple's tried to disrupt a business like that. Remember, Apple Pay Cash was supposed to be a Venmo killer, and it didn't really work out. Things like that. Amazon (AMZN -4.25%) Handmade was supposed to be an Etsy (ETSY -2.75%) killer.
All these big companies, they see other companies having success and they try to get in on the action. That's No. 1. No. 2, I've been saying for years that Apple should buy Square. It even makes even more sense now that the stock's down and the valuation's in the $50 billion range. Apple could do that with something like a quarter of its cash. I think that will be a tremendous value play for Apple. But I think it's something to watch, not something to necessarily worry about.
Jason Hall: Payment processing is just part of the mix. The Square value prop is a lot more than just a device you can use to get money from people.
Matt Frankel: Now if Apple scales it to $100 billion of annualized payment volume, then you've got my attention. But when they're just starting from go, this is not the first time they've tried to disrupt a major tech trend and it won't be the last.
Lou Whiteman: I read that, and it appears that this is an iPhone-to-iPhone thing. There are Android users out there and if you have to buy a terminal anyway to deal with me, yeah, Android user, I don't know. I'm sure they get scale, but if you look at the total market and you look at -- Matt, as you say, there's been so many things -- I think there's a lot of market to go around, but certainly something worth watching.