Markets
AXP

American Express Takes Apple Pay to its Users in Canada

Global electronic payment processor American Express Co. or AmEX AXP will enable its users in Canada to take advantage of Apple Pay service by Apple Inc. AAPL from today.

This facility will allow secure and reliable payments with iPhone, iPad or Apple Watch in stores in the region, where contactless payments and American Express cards are accepted.

For now, American Express is the only partner for Apple Pay in Canada. American Express seemed to be the best fit after other carriers such as Visa Inc. V and MasterCard Inc. MA lingered long over a deal with Apple.

American Express will also roll out Apple Pay payment services in key markets of Australia pretty soon. Further expansion is in the cards, with Singapore, Spain and Hong Kong looking to deploy the service via American Express from next year.

In August, AmEx struck another deal with Apple to promote its Apple Pay. The deal was to integrate Apple Pay services with the AmEx corporate card. Though earlier AmEx allowed non-corporate cards to be integrated with Apple Pay, in August, the company declared that its corporate card users can add their accounts to pay for in-app and in-store purchases using the Apple Pay mobile payments' system. This development can significantly increase the number of Apple Pay users.

Apple Pay has been steadily gaining traction, with retailers and other service providers increasingly adopting the technology. The main aim of Apple Pay, which was launched in Sep 2014, is to provide consumers with a private and secured mode of payment. Keeping in line with this, a very safe and convenient solution has been developed. When a consumer adds a credit or a debit card to Apple Pay, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on the consumer's mobile device. Thereafter, every time the customer makes a payment using Apple Pay, a one-time unique dynamic security code is generated for use instead of the security code at the back of the payment card.

On the other hand, the deepening of the relationship with Apple Pay will likely be a strong long-term growth catalyst for American Express, as it adds to the secured and user-friendly contactless payments service (m-commerce) that these credit card giants have been focusing on since the past few years. Going forward, this secured operational model and investment in technology upgrade is expected to boost investors' confidence in this card giant, which is suffering from numerous headwinds such as the impending loss of its client Costco, currency issues, and higher marketing and promotional expenses.

American Express carries a Zacks Rank #3 (Hold).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MASTERCARD INC (MA): Free Stock Analysis Report

VISA INC-A (V): Free Stock Analysis Report

AMER EXPRESS CO (AXP): Free Stock Analysis Report

APPLE INC (AAPL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

AXP V MA AAPL

Other Topics

Stocks

Latest Markets Videos