Whether Apple (NASDAQ:AAPL) is PayPal (NASDAQ:PYPL) friend or foe is something many have wondered as the latter prepares to report its latest earnings on Thursday, according to Barron’s. In a research note on Monday, BITG analyst Mark Palmer said it is very important for investors to get a clear idea of how the company withstood “a particularly noteworthy test of the resilience to PayPal’s platform to competitive threats.”
Why PayPal’s Earnings Is Important
This will be the first full quarter Apple Pay was available on Macs. Apple users are able to store credit card information in their iCloud accounts with the help of Apple Pay and later use TouchID (Apple’s fingerprint reader) to authorize purchases. On the other hand, PayPal has been in the business of web-based payments for years.
In his note, Palmer notes that as soon as PayPal reports its earnings, a significant amount of movement will be seen in its shares, particularly because it is the time when most of the year’s PayPal news surfaces and the company details long-term trends.
“PayPal’s ability to weather competitive challenges such as that from Apple Pay will be at the core of this process,” Palmer noted.
PayPal, however, feels that the iPhone maker could help its business. Many merchants use its Braintree platform to turn on Apple Pay acceptance, notes Barron’s. Also the U.S. firm recently upgraded its OS, allowing Siri to make payments using PayPal’s Venmo money-transfer service.
Therefore, Thursday’s earnings release will give investors a better understanding of whether Apple Pay is an opportunity for it or poses a threat.