If Apple Adds Tap with Venmo, it Could Add 15-20% to PayPal’s Top Line

By Sam Boughedda

Mizuho analyst Dan Dolev reiterated a Buy rating and $120 price target on PayPal (NASDAQ:) Tuesday, commenting that if Apple (NASDAQ:) enables tap with Venmo, it could add 15% to 20% to the company’s top line.

Dolev’s comments follow recent news of Apple’s tap-to-pay partnership with Block, Inc.’s Square (NYSE:).

“Our proprietary survey of Venmo & Apple Pay users shows strong appetite to tap-to-pay with Venmo if Apple opened up its NFC to Venmo,” wrote Dolev.

“Of the 250 Venmo users we surveyed, ~48% (or 120 people) reported using Apple Pay for in-store checkout. Of those, nearly 80% would consider using tap-to-pay with Venmo instead of Apple if given the option.”

The analyst estimates that “tap-to-pay with Venmo could present a 10% TPV and 15-20% top line upside given Venmo’s high in-store take rates and its attractive ACH/stored balance-driven funding mix.”

Mizuho believes the odds of Apple gradually opening up its tap-to-pay service to Venmo are potentially on the rise, pointing to the partnership with Square as evidence. They added that a Bloomberg report in May stated PayPal helped spur a formal EU antitrust complaint against Apple, arguing that Apple is not allowing other payment platforms to use the feature.

PayPal stock has dipped over 1% Tuesday, adding to its almost 54% year-to-date loss.