Apple (NASDAQ: AAPL) is attempting to make its entrance into the burgeoning mobile payments market with its purchase of a Canadian startup. The entry by Apple into the mobile payments market is set to challenge tech company Square's (NYSE: SQ) current market dominance.
Mobeewave Inc., a Montreal based startup, was purchased by Apple for $100 million. The company is pioneering mobile payment technology that uses the NFC readers in most smartphones to allow for mobile payments without the need for third-party hardware, such as the card readers manufactured by Square. The purchase of Mobeewave is likely an attempt by Apple to create its own proprietary software to compete with Square, much in the same way that Apple has created proprietary apps and hardware for its product line in the past to compete with other tech companies.
Mobeewave's technology had previously caught the attention of Samsung, which partnered with the company to use its phones. Samsung was also an investor of Mobeewave, investing $20 million in the company. Mobeewave had also attracted the likes of NewAlpha, Mastercard (NYSE: MA), and Forestay Capital.
Apple's penchant for proprietary apps to compete with third-party developers is nothing new. In the last year alone, the tech giant has purchased several startups, likely in a bid to expand proprietary app development. Purchases include weather app developer Dark Sky, VR developer NextVR, and AI developer Voysis.
Apple's practices in attempting to create proprietary apps have caught the company considerable flak, primarily due to anti-competition concerns. The company's practices have caused a great deal of scrutiny by the European Union and caused protests by app developers. According to the E.U., Apple's policies erode at the competition, as the company uses data gathered from the app store to support the development of its apps. Additionally, Apple locks many features of its phones out from third-party developers, allowing its own apps exclusive access.