Apple Inc. (AAPL) has snapped up Canadian mobile payment processing startup Mobeewave Inc., in a deal valued at $100 million, according to a Bloomberg report.
Mobeewave’s technology lets shoppers tap their credit card or smartphone on another phone to process a payment. The system works with an app and doesn’t require hardware beyond a Near Field Communications, or NFC, chip, which iPhones have included since 2014.
As part of the purchase deal, the California-based technology giant will retain Mobeewave’s dozens of employees, who will continue to work out of Montreal.
“Apple buys smaller technology companies from time to time and we generally do not discuss our purpose or plans,” an Apple spokesman told Bloomberg.
Apple has in the past purchased startups to turn their technology into features of its products. Apple added Apple Pay to the iPhone in 2014, allowing users to pay for physical goods with a tap in retail stores. Last year, it launched its own credit card, the Apple Card. Integrating Mobeewave could let anyone with an iPhone accept payments without additional hardware.
This would put Apple into direct competition with the likes of Square Inc., a leading provider of payment hardware and software for smartphones and tablets.
Mobeewave last year partnered with Samsung Electronics for their phones to deploy its technology. Samsung’s venture arm is also an investor in the startup, which has raised more than $20 million.
Shares in Apple have surged 45% this year as stay-at-home orders during the coronavirus pandemic have been good for business. The pandemic has created opportunities for companies like Apple who are weathering the crisis well and are looking to increase their reach and boost market share.
The iPhone maker has been on a shopping spree this year with the acquisition of weather app Dark Sky, virtual reality video streaming startup NextVR, artificial intelligence startup Voysis, and Fleetsmith for enterprise device management.
Following Apple’s Q2 results last week, Barclays analyst Tim Long raised his price target to $400 (5.9% downside potential) from $326 but maintained a Hold rating on the stock, saying that the current multiple “fully reflects the upside in services and a 5G iPhone”.
Long cautioned that while the iPad and Mac outlook “remains rosy” driven by work-from-home demand, “we could see risk in future quarters”.
Overall, the rest of the Street is cautiously optimistic on the stock with a Moderate Buy analyst consensus. In light of the sharp rally this year, the $420.12 average price target indicates shares are now more than fully priced implying 1.2% downside potential to current levels. (See Apple stock analysis on TipRanks)