JP Morgan: Apple has multiple routes to mobile payments, significant lock-in benefit

Tiernan Ray reports for Barron’s, “Into the fray over Apple’s potential entrance into electronic payments today enters Rod Hall of J.P. Morgan, who has an Overweight rating on the shares, and a $108 price target, writing that there is a ‘high probability’ of the company announcing something at next Tuesday’s media event in Cupertino, and that the benefit to the company may be ‘significant platform lock-in.'”

“There are multiple routes to Apple delivering payments to its users, with increasing levels of payoff for the company but also increasing risk, notes Hall,” Ray reports. “Hall thinks Apple will probably have just ‘virtual’ versions of credit cards on devices like the iPhone running its iOS software.”

Read more in the full article here.

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  1. What I’d like to see if Apple release a money management program along with “iWallet” (or whatever it will be called) that automatically inputs your spending, as well as handle all other financial management functions that Quicken does. It would be a nice good riddance kick-in-the-ass for Intuit for all their years of ignoring OS X and iOS.

  2. Google is simply watching and waiting for Apple to establish a mobile payments system then it can set up some duplicate system on Android devices and then take over by way of smartphone market share. Google will make sure its hardware partners put fingerprint scanners and NFC chips on $100 Android One smartphones so even the poorest of people can make mobile payments. I’m willing to bet Wall Street doesn’t even consider a widely accepted smartphone mobile payments plan as innovation because it’s not strictly a hardware thing.

    I’m wondering if a really good fingerprint scanning system requires a really hard substance or will the Android manufacturers find another way to authenticate payments. Apple has made for itself quite a lot of sapphire production and I’m guessing they have a pretty fair chunk of the sapphire manufacturing market so it could be scarce for rivals. Apple could afford to make the entire face of a wearable device out of sapphire for fingerprint verification and that would be hard for most Android manufacturers to duplicate and save on costs.

    I almost never use cash anymore (I don’t like handling paper money or silver) and if I can have a wearable device with NFC that allows me to make small payment transactions I would certainly welcome it. Wall Street is making light of this but I truly believe Apple could change the way things are being paid for in the U.S. at least, as long as Apple gets enough support from banks and credit card companies.

  3. While there are a lot of options available for handling credit card payments I’ll be looking for several features before taking it up.

    First, I’m getting British Airways miles on the card I use. Is Apple ensuring that I get those miles? Critical for a lot of people.

    Second, will I continue to get the same customer set security features? I get an email every time my card is used to buy gas, every time a charge is made without the physical card used (like phone & internet sales) and every time a charge is made over an amount I set (which is $25 after the Home Depot hack).

    These are the type of things I’m going to be looking at and my card is not so heavy that i can’t continue to carry it until Apple meets my basic needs.

  4. What I’d like to know is exactly HOW would I make a debit card transaction if all the retailer has in front of him is a card swiper and I’m standing there with an iPhone 6?

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