Is Apple Really Looking To Rival Jack Dorsey's Block With 'Tap To Pay?'

Loup Funds’ analysts Gene Munster, Doug Clinton, and Andrew Murphy talked about Apple Inc’s AAPL “Tap to Pay” feature and how it affects its rival purveyor of Square devices Block Inc SQ. 

What Happened: Munster said that Apple’s move has created a “stir” on whether or not the tech giant is a rival to the Jack Dorsey-led company. 

“We’re confident that Apple is not competing with Square or other third-party payments. They are essentially integrating with them to enable this,” said Munster.

Murphy said that the significance of Apple’s latest move is that the latter is expanding the Apple Pay ecosystem.

“Apple Pay has become a huge success but it has been relegated to the iOS ecosystem now that product is unlocked essentially to other devices, other cards, and other phones.”

Murphy said this unlocking is through Apple Pay and  Tap to Pay but also through Apple’s partner network that spans companies like Stripe, Swipe, and Block. 

Murphy clarified that while Android phones and credit cards with contactless payment built-in can be used with Tap to Pay to make payments, the latter technology cannot be deployed on non iOS devices.

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Why It Matters: Apple’s Tap to Pay uses near-field communication (NFC) technology for making various types of payments. 

Stripe and Shopify Point would be the first to offer Tap to Pay to business customers in the United States in the spring of 2022.

Barclays analyst Ramsey El-Assal noted that the Apple solution will be available for payments platform operators and app developers to integrate into their respective iOS apps, which presumably includes Square’s Point of Sale app. 

Price Action: On Tuesday, Apple shares closed 1.85% higher at $174.83 in the regular session. The shares rose another 0.2% in the after-hours trading.

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