Morgan Stanley Thinks Apple Pay Could Push Mobile Payment Infrastructure Forward

Morgan Stanley analysts on Tuesday offered commentary on Apple Inc.’s AAPL Apple Pay application.

Apple Pay is an application that allows iPhone users to make payments with bank cards securely on a mobile device.

Morgan Stanley analysts find that the market has gravitated towards a hardware-based payment solution over a cloud based solution and expect Apple’s payment platform to advance standardization of mobile payments infrastructure.

Betsy Graseck feels that Apple has solved the problems its competitors have struggled with, that is, making the package cost effective for merchants and convenient for consumers.

However, analysts find that Google Inc’s Host Card Emulation (HCE) presents an alternative ecosystem that could be equally attractive to merchants and potentially less expensive to issuers.

Graseck finds that the development of mobile payment systems does not present a major threat to the traditional payment methods of Visa, Mastercard and others.

Ultimately, if Apple is able to reduce fraud, improve data security, and protect the value of existing payments value chain, analysts believe Apple Pay has a high chance of success.

Shares of Apple recently traded at $99.67, up 0.05 percent.