Your wallet is fairly archaic, and it will eventually be replaced by some type of electronic device. Most likely it will be your Apple (NASDAQ:AAPL) iPhone or Google (NASDAQ:GOOG) Android device. In fact, these smartphones already have the power to become virtual wallets.
With the rapid growth in the mobile market, the m-commerce trend is expected to be massive. According to eMarketer, sales are expected to grow from $6.6 billion in 2011 to a whopping $31 billion in 2015.
Which will be the winners? How about the losers?
Let’s take a look:
Just a few years ago, eBay (NASDAQ:EBAY) was struggling. But it made some major bets on mobile via internal development and acquisitions. The company has also leveraged its PayPal platform, which contributes close to 40% of overall revenues. It’s even making inroads with major merchants, such as Home Depot (NYSE:HD).
PayPal also makes it easy to develop m-commerce apps. For example, Cumberland Farms allows customers to start the pump at its gas stations with a smartphone and make a payment.
For this year, eBay projects that its global mobile-payment volume will reach $7 billion, almost double last year’s $4 billion.
The company is in an ideal position to be the big winner in m-commerce. It can develop an iWallet system, which would have the instant trust of customers. Besides, Apple is one of the most financially sound companies in the world. In fact, it looks safer than mega-banks such as JP Morgan Chase (NYSE:JPM), Citigroup (NYSE:C) and Bank of America (NYSE:BAC).
Apple can also use its marketing savvy to educate consumers on how to use m-commerce. Just look what the company has done with iCloud. Since October it has attracted more than 125 million users. It’s already the largest player in the space, with No. 2 Dropbox at more than 50 million.
Oh, and Apple is also trading at a reasonable valuation — 13 times earnings.
The company is still private, but there’s a good chance it will go public within the next few years. Square was created by Jack Dorsey, the mastermind who also helped to create Twitter.
Essentially, Square turns an iPhone or an iPad into a virtual cash register. A merchant will attach a reader to the device that allows for the swiping of credit and debit cards.
But Square goes beyond processing transactions. It has an inventory system and even provides analytics, which can help merchants sell more products.
Square is now processing $5 billion in annual payments, up from a $4 billion rate in March.
If m-commerce continues to grow — and it seems reasonable to assume that it will — then traditional retailers could be in serious trouble. Millions of people are already using their smartphones to “showroom.” That is, they go to a retailer’s site and check out products before making purchases on their smartphones. In other words, big-box operators such as Best Buy (NYSE:BBY) and Target (NYSE:TGT) could be promising long-term shorts.
Another group of companies that could be threatened are cash register and traditional point-of-sales operators such as NCR (NYSE:NCR) and VeriFone (NYSE:PAY). These look like dinosaurs in the new world of m-commerce.
Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He also is the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned securities.