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VeriFone Systems Inc. (PAY) To Be Biggest Beneficiary Of Apple Inc. (AAPL)’s Apple Pay: Jim Cramer

Apple Inc. (NASDAQ:AAPL) latest invention Apple Pay is all but set, to cause one of the biggest impact on the payment and security systems in the wake of increased cyber-attacks in the United States. CNBC’s Jim Cramer believes that one of the biggest beneficiaries of Apple Pay going viral has to be VeriFone Systems Inc. (NYSE:PAY). Retailers by 2015 will be required to upgrade all their payment terminals to match EMV security standards.

VeriFone Systems Inc. (NYSE:PAY) is one of the biggest players on the point of sales systems, providing solutions for retail, financial and transportation sectors. VeriFone controls 5 million of the total 8 million installed payment terminals in the U.S with any upgrade cycle expected to be good for business.

“Nearly 70 million Apple Pay enabled devices could ship over the next two years that twice the number of American Express cards currently in circulation within United States. If a retailer wants to accept Apple Pay, it needs a point of sale terminal that is compatible with Near Field Communication technology used by Apple. That’s another big reason for merchandise to upgrade their payment system which again means more business for VeriFone Systems Inc. (NYSE:PAY).”

According to RE/Code co-executive Editor, Walt Mossberg, Apple looks to have addressed all the loopholes that should make Apple Pay a success. The only concern at the moment according to Mossberg is that Apple Pay popularity and expansion could be limited by the number of stores fitted with Near Field Communication machines.

“[..] In terms of the number of stores, that’s the big question whether it is Apple or anyone else doing this. Apple Inc. (NASDAQ:AAPL) has done a really good job with the software and the hardware on this to make it super simple,” said Mr. Mossberg.

Cramer expects Apple Inc. (NASDAQ:AAPL) to steam roll the mobile payment platform with Apple Pay making retail customers demand the service in all the stores they do their shopping. The result should be, retailers placing orders on VeriFone Systems Inc. (NYSE:PAY) near Field Communication enabled systems. Increased orders according to Cramer should allow VeriFone to generate $250 million in revenue growth by 2016 with the increase of EMV point of sale terminals from 30% to 70%.

Cramer believes the upgrade terminal cycle could propel VeriFone Systems Inc. (NYSE:PAY) stock to highs of $48 at the back of a faster growth rate. The only way PayPal could stand a chance against Apple Inc. (NASDAQ:AAPL)’s Apple Pay is by acquiring VeriFone according to Cramer.


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