Apple's major update to payment features impacts these US stocks the most
Apple Inc. unveiled the Tap to Cash feature and Apple Pay online payment service at the WWDC 2024 conference, along with an expansion of its "Buy Now, Pay Later" feature. This has impacted several publicly traded payment stocks. The new Tap to Cash feature allows iPhone users in the United States to send and receive Apple Cash by holding two phones together. Another feature of iOS 18 is the ability for Apple Pay to be used on desktop browsers outside of Safari, such as Firefox, Chrome, and Edge. These updates may pose challenges to competitors like PayPal
According to Zhitong Finance, KeyBanc Capital Markets analyst Alex Markgraff stated that Apple Inc. (AAPL.US) unveiled the Tap to Cash feature and Apple Pay online payment service at the WWDC 2024 conference, as well as expanded its "Buy Now, Pay Later" feature, impacting several publicly traded payment stocks.
The new Tap to Cash feature allows iPhone users in the United States to send and receive Apple Cash by holding two phones. Another feature of iOS 18 is the ability for Apple Pay to be used outside of Safari on desktop browsers such as Firefox, Chrome, and Edge. In a report to clients this week, the analyst wrote, "In many ways, we believe these updates bring greater parity with peers (such as PayPal (PYPL.US)), as most digital wallets are browser-agnostic and can redeem rewards from other issuers within the digital wallet."
The enhanced wallet functionality also allows iOS 18 users to access installment financing options from banks. Additionally, users can view reward or point balances in the "Wallet" and redeem points using Apple Pay online and in apps. Markgraff stated that the updates to Apple Pay will pose a greater challenge to PayPal, which is "working to reinvigorate its brand momentum in payments and may compete with rivals such as Apple Pay and Shop Pay."
He noted that in the "Buy Now, Pay Later" category, "we believe Apple Pay's installment payment announcement is a net negative impact on PayPal's Pay In 4 and Block (SQ.US), and a net positive impact on Marqeta (MQ.US), assuming Apple continues to be linked with Affirm (AFRM.US) in the new AFRM/Apple Pay structure."
Many of the updates to Apple Pay are closely related to several products announced by Visa (V.US) last month, which are planned to launch this fall. The analyst added, "Therefore, we believe these updates are positive for Visa."