Visa's (V)/Mastercrard (MA) Alive and Well Despite Mobile Payment Hype
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Today's Overall Ratings:
Up: 6 | Down: 5 | New: 2
Rating Summary:
15 Buy, 16 Hold, 5 Sell
Rating Trend:
Down
Today's Overall Ratings:
Up: 6 | Down: 5 | New: 2
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Last week, Reuters put out a story about a new check-out system at Walmart (NYSE: WMT) that would allow customers to use their Apple (Nasdaq: AAPL) iPhones at special self checkout counters. If successful it would slash costs for the retailer and speed checkout times.
While the report is interesting, it is not a market mover for Apple or for Walmart. However, it could be a mover for shares of Visa (NYSE: V) and Mastercard (NYSE: MA). In an article on Street.com, investor Richard Saintvilus wrote "I'm starting to get the sense that these card companies, many of which have introduced convenience to the payment process, could be in trouble."
Last month, Starbucks (NASDAQ: SBUX) formed a partnership with tech newbie Square for mobile payments. Google (NASDAQ: GOOG), Paypal, and the other startups are trying to enter the game as well.
In theory, the use of Square or another payment system wouldn't eliminate Visa or Mastercard, since they could be a part of the transaction. For example, customers would use their Visa account through Square and on their mobile phone. This seems like a logical approach, and there is no doubt that the major credit card companies have a system like this on the top of their minds. In this case, fears about Apple destroying Visa are way overblown.
The risk is, like all new technology, we simply don't know how it will develop. Will consumers someday link their banks accounts with Apple and Google as the payment processors and eliminate middleman Visa and Mastercard? Maybe, but this takes a huge leap of imagination. For now, despite the hype, and the talk, and the speculation, it really is a wait and see game. While not the most exciting conclusion, it doesn't have to be. Sometimes investing is like sky diving. Other times it is like watching paint dry. Knowing which direction mobile payment technology will go will involve plenty of paint, and time, and observation, and analysis.
While the report is interesting, it is not a market mover for Apple or for Walmart. However, it could be a mover for shares of Visa (NYSE: V) and Mastercard (NYSE: MA). In an article on Street.com, investor Richard Saintvilus wrote "I'm starting to get the sense that these card companies, many of which have introduced convenience to the payment process, could be in trouble."
Last month, Starbucks (NASDAQ: SBUX) formed a partnership with tech newbie Square for mobile payments. Google (NASDAQ: GOOG), Paypal, and the other startups are trying to enter the game as well.
In theory, the use of Square or another payment system wouldn't eliminate Visa or Mastercard, since they could be a part of the transaction. For example, customers would use their Visa account through Square and on their mobile phone. This seems like a logical approach, and there is no doubt that the major credit card companies have a system like this on the top of their minds. In this case, fears about Apple destroying Visa are way overblown.
The risk is, like all new technology, we simply don't know how it will develop. Will consumers someday link their banks accounts with Apple and Google as the payment processors and eliminate middleman Visa and Mastercard? Maybe, but this takes a huge leap of imagination. For now, despite the hype, and the talk, and the speculation, it really is a wait and see game. While not the most exciting conclusion, it doesn't have to be. Sometimes investing is like sky diving. Other times it is like watching paint dry. Knowing which direction mobile payment technology will go will involve plenty of paint, and time, and observation, and analysis.
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