The Zacks Analyst Blog Highlights: eBay, Google, Apple, Bank of America and JPMorgan Chase

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Jun 06, 2012, 09:30 ET

CHICAGO, June 6, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include eBay Inc. (Nasdaq:EBAY), Google Inc. (Nasdaq:GOOG), Apple Inc. (Nasdaq:AAPL), Bank of America Corporation (NYSE:BAC) and JPMorgan Chase & Co. (NYSE:JPM).

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Here are highlights from Tuesday's Analyst Blog:

Mobile Wallets Threaten Bank Revs

Emergence of mobile wallets is expected to pose a threat to the revenues of banks and financial institutions. This has been concluded by the latest survey conducted by a financial consulting firm, Carlisle & Gallagher Consulting Group. As per the findings, because of these mobile wallets, banks and financial institutions are expected to face increased payments-related competition from non-financial companies in the near future.

Survey Findings

The survey was conducted in April and about 605 consumers participated in the survey. The findings were quite surprising as nearly 48% of the respondents stated that they would prefer making payments for goods through mobile wallets, if given a choice. The survey also confirmed that the consumers are not interested in payment options provided by their respective primary banks. Further, these consumers showed interest in other services – search & shop, loyalty programs and real-time incentives – offered by mobile wallets.

Additionally, among those who are interested in using mobile wallets, 80% affirmed that they would consider making payments through PayPal Inc., owned by eBay Inc. (Nasdaq:EBAY). Further, 60% avowed that they would like to use Google Inc.'s (Nasdaq:GOOG) services and the same percentage voted for Apple Inc. (Nasdaq:AAPL), though currently it does not offer this facility.

Meeting the Increasing Demand

Banks and financial institutions get significant amount of revenue for transferring money from the purchaser to the seller through debit and credit cards. If the non-financial companies also start providing similar services, the revenue and market share of banks would definitely get hurt.

Many non-financial companies have already started providing mobile wallet facilities in an effort to tap the growing demand. The banks are now waking up to the changing needs of their customers and have started offering mobile wallet facilities to customers on their own. Bank of America Corporation (NYSE:BAC) has successfully tested the technology related to mobile wallets in selected markets and plans to offer more in the near future. Similarly, JPMorgan Chase & Co. (NYSE:JPM) is also trying hard to meet the growing demand for mobile wallets and improve their market share through it.

How Real Is the Threat?

Though conducted on a smaller scale, the survey is expected to have greater and more negative implications on the revenues of the banks. Over the next few years, most of the customers would be using mobile wallets to make payments. For customers, it is a service that enables them to keep track of coupons, loyalty programs and other incentives in a hassle-free way.

For banks, which are facing various regulations related to revenue generation, mobile wallets present an opportunity to recoup some revenue. If the banks don't take immediate action, other non-financial companies may garner a major market share, leading to revenue losses.

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