Financial Sector Ideas

[gfp927z]

>>> Apple’s Bet on a Cashless Future Could Pay Big Dividends for Investors, Analyst Says


Barron's

Aug. 28, 2020


https://www.barrons.com/articles/apples-bet-on-a-cashless-future-could-pay-big-dividends-for-investors-analyst-says-51598657910?siteid=yhoof2&yptr=yahoo


Apple’s Bet on a Cashless Future

Aug. 28: Like “jet packs” and “flying cars,” a frictionless future without physical money has been a staple of pundits’ and authors’ sci-fi speculations since the first ATMs were installed in 1969....

However, the fact remains: In 2020, cash is still very important to Americans’ everyday lives. According to Federal Reserve numbers, while 86% of people report using “plastic” at least sometimes, nearly 13% of economic activity in the U.S. is still in cash. That’s roughly $2.7 trillion dollars, and it’s “money on the table” for fintech innovators. Traditional credit-card companies and banks haven’t shown much interest in going after it.

But there’s a company with the vision to see this as a $2.7 trillion opportunity for the taking....I’m talking about Apple (ticker: AAPL). The iPhone is still very important—and could become more so with the 5G model on the horizon—but Apple’s Apple Pay fintech and its other innovations have become bigger and, indeed, more important contributors to Apple’s bottom line since about 2014. Apple watchers like me were excited earlier this month when the company spent $100 million to acquire a small start-up called Mobeewave. It didn’t generate many headlines, but in my view, this is a critical step on the road to another trillion in Apple’s market cap.

The Mobeewave tech that Apple now owns specializes in near-field communication, or NFC, a set of communications protocols that two electronic devices can use to talk over a distance of just 1.5 inches or less. It has an array of applications—it can be used for identification and authentication and keyless entry, for instance.

But perhaps its biggest and most important application is in the growing field of contactless payments. They are coming of age at an interesting time: a novel coronavirus pandemic. The digital-payment market is expected to more than double to $87.6 billion by 2023 and, beyond that, to $98 billion by 2027. A great deal of that business will go to companies like Apple and Square (SQ)....

A recent study by Visa, conducted during the pandemic, revealed the unsurprising result that two of every three American consumers would now prefer contactless, cashless transactions. It’s clear to me that these consumers and the businesses that serve them will practically beat a path to Apple’s door.

<<<