Stock markets reacted quickly on June 16, 2024, when Apple (AAPL) announced features of Apple Wallet. Its massive iPhone user base will enjoy the Wallet’s Tap to Cash and Apple Pay online. Furthermore, Apple expanded Buy Now, Pay Later.
Tap to Cash enables iPhone users to send and receive Apple Cash. Users need only tap the two phones together. This would hurt banks that earn fees from Interac. Money transfer volumes, along with the fees collected, would fall for companies like PayPal (PYPL).
Fintech investors should re-evaluate the growth potential of PayPal and Block (SQ). Instead, consider holding more established firms like Visa (V) and Mastercard (MA). Capital One (COF) is also worth looking at. The firm will buy Discover Financial (DFS) for $35 billion.
Fintech companies that benefit from Apple Pay updates include Affirm (AFRM) since it will supply Apple with the financing functions of the BNPL payment option.
Risks for Apple
Only iPhone users may embrace the new Apple Pay features. Android still has a large user base, too. This would undermine the bearish pressures for PYPL and SQ stock. Unfortunately for Apple competitors, users pay for music, movies, and apps with Apple Pay. This will grow further in the coming quarters.