Apple (AAPL) is working on a new service that will convert iPhones into payment terminals to rival Square (SQ), the market leader in this space. Citing people with knowledge of the matter, Bloomberg reports that the company has been working on the feature since it paid $100 million for Mobeewave in 2020.
Apple is a U.S. company that designs, manufactures, and sells smartphones, tablets, and personal computers, and offers related services. Apple’s upcoming earnings report for Fiscal Q1 2022 is scheduled for January 27, 2022.
iPhone Payment Terminals
The Bloomberg report indicates that the new payment service will use iPhone’s near-field communications NFC chip. Small businesses will be able to accept payments directly on their iPhones with the tap of a credit card or another iPhone.
However, it is still unclear whether Apple will brand the new payment service as part of Apple Pay. It is also not yet known whether the tech giant intends to partner with another payment network on the new service or go it alone. The company could launch the new payment feature via a software update in the coming months.
Apple has been expanding into the payment sector over recent years. It launched the Apple Card in the U.S. in 2019 and rolled out device installment plans on the credit cards later that year.
Bank of America Securities analyst Wamsi Mohan recently reiterated a Buy rating on Apple stock with a $210 price target, implying 31.50% upside potential to current levels. According to the analyst, the company is well-positioned to deliver solid Q1 financial results on an improved supply of higher-end phones. However, the analyst expects the company to face a tough year of comparisons.
Consensus among analysts is a Strong Buy based on 22 Buys, 4 Holds, and 1 Sell. The average Apple price target of $181.40 implies 13.60% upside potential to current levels.
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