Seeking Alpha

Apple rises, eBay slips following payments report; questions remain

  • Apple (AAPL +1.2%) is rising going into today's FQ1 report, and PayPal parent eBay (EBAY -2%) is selling off, after the WSJ reported Apple is hatching plans for a mobile payments service. Point-of-sale hardware vendors VeriFone (PAY -2.3%) and NCR (NCR -2.6%) are also lower.
  • The report left some major questions unanswered. A big one: Will Apple's service only cover transactions taking place in physical stores, or will it also cover mobile e-commerce transactions?
  • The latter would be a much larger threat to PayPal, which handled $27B worth of mobile transactions (largely e-commerce-related) in 2013, but for now only has a small presence in the offline payments realm (the company is trying hard to change that).
  • Given Apple's history, an Apple payments service is unlikely to support Android. That could limit merchant interest in regions where Android has a dominant smartphone share (the EU, Latin America, parts of Asia), assuming Apple plans to take the service overseas.
  • Carl Icahn mentioned payments as a major growth opportunity for Apple last week, highlighting the company's ability to leverage its 575M+ iTunes accounts, fingerprint sensors, and iBeacon.
  • Analysts expects Apple to report FQ1 EPS of $14.09 (+2% Y/Y) this afternoon, and revenue of $57.46B (+5.4%). Gene Munster believes the Street expects 56M-57M iPhone sales, 24M-25M iPad sales, 4.6M Mac sales, and a gross margin of 37.5% (at the high end of Apple's guidance range).
Comments (7)
  • Deja Vu
    , contributor
    Comments (1153) | Send Message
     
    Apple payments...MC & Visa's 0.65% transaction fee will look puny before whatever Apple decides to charge...a few high end luxury stores will pay maybe 3-5% as transaction fees...apple will have a huge margin and a tiny tiny market share....bulls will crow about how Apple makes a 95% margin while MC and visa don't... ]some fanboys will crow about "the quality" of the payment and the "elegant minimalistic" design of the payment interface....which will be crippled by several "features" such as you can only pay in round amounts of $10...all which said features will go to show the far seeing future prognostication capablity of Apple...eventually after 20 years Apple will extend the payment to China...immediately bulls will say 1.6 BILLION people who will all rush to use $10round payment while paying 30% cut to Apple...just like the people on welfare back in the US who buy the iPhone 5S....who will feel so relieved that they no longer have to do calculations now that everything is rounded up to the next multiple of $10...certain fanboy authors here on SA will write about the "Brilliance of Apple and why it makes the best payment systems in the world"...not to mention Apple will then invent mobile payments & credit cards, patent them, and sue every credit card issuer, Paypal, Visa and MC in Cupertino and some not too bright bay area jury will award gadzillion-bajillion in damages...next Apple patent "Rectangular Strip of Plastic with Rounded Corners with a 16 digit number Embossed on Said Surface"
    27 Jan, 11:37 AM Reply Like
  • AmmarStar
    , contributor
    Comments (31) | Send Message
     
    Wow Deja Vu, you seem to come from the future, now if I can just leverage this great news to make tons of $. hummm how can I do that? :)

     

    none the less, it was entertaining to read your comment, smart people that have figured the system "that if they exist" will not share their info with us, so the bull/bear news/ideas you read it's not worth what it seems
    27 Jan, 02:20 PM Reply Like
  • bgold1955
    , contributor
    Comments (1944) | Send Message
     
    As a former merchant, I can tell you I paid a littler over 2.5 % of purchase price for credit card use. Over 3% for AMEX cards. Both include a middle man (for processing) of the middle man V, MA, AMEX.
    Not sure you understand current pricing for credit card swipes for merchants. There is huge opportunities for both saving (merchant) & generating (AAPL) dollars.

     

    For example, I have a credit in iTunes & chose to spend it at Joe's Shoe Shop which has an AAPL app that allows transactions between the two. I can guarantee the merchant would not allow that transaction if it cost more than the traditional method. Could be a game changer!
    27 Jan, 03:16 PM Reply Like
  • investingInvestor
    , contributor
    Comments (1238) | Send Message
     
    two bits:
    1) What will listeners drill Apple execs about at the Q1 phone conference? heh-heh!
    2) Apple cannot include Android because Android is a malware magnet, too fragmented, spinning out of control. Even Google could not include Android for secure payments. End of that story.
    27 Jan, 11:47 AM Reply Like
  • pman6
    , contributor
    Comments (270) | Send Message
     
    80% chance aapl will tank ah today
    27 Jan, 12:32 PM Reply Like
  • Harry Polizzi
    , contributor
    Comments (319) | Send Message
     
    "80% chance aapl will tank ah today"

     

    100% chance aapl above three comments will prove to be wildly wrong.

     

    Ayuh
    27 Jan, 01:26 PM Reply Like
  • flux8
    , contributor
    Comments (582) | Send Message
     
    - Larger iPhone
    - Apple mobile payments
    - iWatch
    - Apple TV as a gaming console
    - TV content provider deal
    - iOS for automobiles
    - iBeacon
    - A8
    - iPad Pro
    What's next? Plenty.
    27 Jan, 02:58 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector

Next headline on your portfolio:

|