Block, Inc. SQ recently formed a partnership with Apple AAPL. Per the terms of the deal, SQ’s Square Point of Sale (POS) app will be equipped with Apple’s contactless payment acceptance feature named Tap to Pay on iPhone.
Apple’s Tap to Pay on iPhone incorporates Block’s broader ecosystem of tools, which help sellers smoothly start, run and grow their businesses.
Further, Apple with its Tap to Pay on iPhone feature ensures that sellers never miss a sale and gain more flexibility to use new commerce tools.
With the recent initiative, sellers having an iPhone and Square POS app will be able to accept in-person contactless payments in a safe and seamless manner.
Additionally, sellers can expand their businesses with marketing and loyalty programs. They can also track their product inventory and simplify their cash flow with business banking tools.
It is worth mentioning that Block released an Early Access Program for Tap to Pay on iPhone for selected sellers to test the new capability and received positive feedbacks.
Thus, the recent collaboration is expected to help Block expand its seller base, which in turn, is likely to contribute well to its top-line growth.
Block, Inc. Price and Consensus
Block, Inc. price-consensus-chart | Block, Inc. Quote
Efforts to Boost Prospects
The latest partnership bodes well with Block’s growing initiatives toward offering seamless contactless payment options to its sellers.
Earlier, Block launched a contactless and chip reader, which helps sellers quickly receive money in their bank account by accepting chip cards, contactless NFC (near-field communication) cards, Apple Pay and Google Pay from anywhere.
The growing efforts are helping Block expand presence in the booming contactless payment market.
The underlined market is witnessing significant growth owing to rising demand for seamless and faster processing payments. Further, a surge in digitalization and an increase in online shopping across the globe are acting as key factors.
During its Jan 27, 2022, earnings call, Visa reported that around 20% of all in-person credit or debit card transactions in the United States are now contactless transactions.
Per a Grand View Research report, the global contactless payment market is expected to witness a CAGR of 20.3% between 2021 and 2028.
Growth in the contactless payment market is driving the global digital payment market. The market is likely to hit $361.3 billion in 2030, seeing a CAGR of 20.5% from 2022 to 2030, according to a report by the same firm.
Heightening Competition
Given this upbeat scenario in the digital payment space, not only Block but other companies like PayPal PYPL and Shopify SHOP are gaining momentum worldwide on the back of their growing efforts and a robust portfolio of offerings.
PayPal has been benefiting from its peer-to-peer payment service Venmo for a while. Venmo’s improving monetization efforts and its rising adoption rate across various platforms are aiding growth in total active accounts, which is noteworthy. The solid momentum of core peer-to-peer and PayPal Checkout experiences remains another tailwind.
Further, PayPal offers simple, affordable financial services and digital payment facilities, enabling customers and merchants to access and move their money anywhere, anytime and through any connected device. This helps PayPal bolster customer engagement.
Shopify is winning merchants regularly owing to its robust product offerings, including Shop Pay and Shop Pay Installments as well as features like end-to-end order tracking. Strength in Shopify Shipping, Shopify Payments and Shopify Capital is another boon.
Checkout using Shopify Payments is directly integrated with Google, Facebook and Instagram, among others, enabling merchants to sell across these channels, easily. This helps Spotify strengthen its momentum among the merchants.
Nevertheless, Block’s growing collaborations, robust portfolio offerings and strengthening seller momentum will continue to aid in gaining a competitive edge against the above-mentioned peers.
Currently, Block carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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