On Friday, Bloomberg reported that Apple had bought Mobeewave, a startup that has developed a payments system that lets users conduct transactions by tapping a smartphone containing an NFC chip against either a smartphone or a credit card that also has an NFC chip. The purchase price is said to be around $100 million.
Mobeewave had previously struck a deal with Samsung meant to enable the use of its technology on Samsung devices. There’s a good chance that partnership will be coming to an end now that Mobeewave is a part of Apple.
There’s some speculation that the Mobeewave acquisition will spell additional competition for Square’s (SQ) - Get Square, Inc. Class A Report point-of-sale (POS) payments platform. However, given that Square’s platform already supports Apple Pay and other NFC-based payment solutions with the help of its mobile POS apps, it’s possible that the company will also support Mobeewave’s technology in time, should Apple integrate it with Apple Pay.
News of the Mobeewave deal comes about a month after iOS 14 code was uncovered that indicates Apple Pay will soon allow iPhone users to make payments using either QR codes (a very popular payment option in China) or traditional barcodes. The code suggests users will be able to either scan a QR code or barcode with an iPhone camera, or have their iPhones generate a QR code that a merchant can scan.
PayPal (PYPL) - Get PayPal Holdings Inc Report is also showing an interest in driving QR code adoption among its merchant and user bases. The company added QR code support to the PayPal app in 28 countries in May, and is working with CVS (CVS) - Get CVS Health Corporation Report to have the technology supported at all of the drugstore giant’s 8,200 U.S. stores by year’s end.
All of these moves come at a time when COVID-19-related concerns are speeding up the long-term shift from cash to card-based transactions, and are also driving greater adoption of NFC-based contactless technologies.
On its July 28 earnings call, Visa (V) - Get Visa Inc. Class A Report disclosed that it saw nearly 50 countries increase their tap-to-pay penetration rates by more than five percentage points during its June quarter, and that more than 10 countries increased their penetration rates by ten points or more. The company also noted that it added more than 80 million contactless cards to its U.S. network during the first half of 2020.
In Apple’s case, regulatory pressure to allow greater support of third-party payment platforms on its hardware might also be motivating it to expand the number of payment options supported by Apple Pay.
In June, the European Commission said it’s investigating Apple’s unwillingness to allow third-party payments platforms to use the NFC radios within iOS devices to handle tap-to-pay transactions. The EC also said it’s worried that Apple’s terms for the integration of Apple Pay on merchant websites and apps on iOS and iPadOS devices “may distort competition and reduce choice and innovation.”
Apple’s stock is up 2.8% in Monday trading, making fresh highs and adding to the giant Friday gains it saw in the wake of Apple’s big June quarter sales and EPS beats.