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Alphabet (GOOGL) Adds Loyalty Cards to Wallet App for Wear OS

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Alphabet’s (GOOGL - Free Report) Google announced an update to its Wallet app for Wear OS, enabling users to access their loyalty cards.

With the addition of the latest update, Google Wallet on Wear OS now supports all loyalty cards stored on phones or Google Accounts, appearing after payment methods.

Additionally, users can tap on a QR or barcode to view details, scroll down for more information and use shortcuts like “Open on phone” or “Delete pass” on their smartwatches.

Alphabet is expected to gain solid traction across smartwatch users on the back of its latest move. This, in turn, will position the company well to create a strong foothold in the global smartwatch market.

Per a Vantage Market Research report, the global smartwatch market is expected to be valued at $130.06 billion by 2030, exhibiting a CAGR of 18.6% between 2023 and 2030.

Expanding Google Wallet Features

Google is set to introduce a new Wallet notifications feature in Version 23.46.x of Google Wallet on Android, enabling users to send payment notifications directly from the app.

Further, Google announced Wallet updates to support open-loop payment systems, providing a dedicated page for recent activity and ride history, showing saved fare caps, connected payment methods, and network-specific offerings.

Additionally, Google updated its Wallet app with a link-based pass-sharing feature for airline boarding and events. Users can open a pass below the carousel of credit and debit cards and a share button appears. However, undoing the sharing is not possible.

We believe that all the above-mentioned endeavors will likely aid Alphabet in strengthening its footprint in the global digital wallet market.

Per an MMR report, the digital wallet market is expected to reach $3.61 billion by 2029, witnessing a CAGR of 14.8% between 2023 and 2029.

We believe the company’s solid prospects in the promising digital wallet market are expected to instill investor optimism in the stock.

Alphabet has gained 50.2% on a year-to-date basis compared with the industry’s rise of 52.2%.

Moreover, the aforementioned endeavors will aid Alphabet to compete well with some notable industry players like Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) , which have positioned themselves well in the digital wallet space.

Microsoft is enjoying the growing momentum of its Edge Wallet with new feature updates.

Microsoft’s recent Wallet app update includes the integration of a cryptocurrency wallet, providing real-time updates on cryptocurrency value fluctuations and logging transactions. The "explore" tab updates users on cryptocurrency news, while the "assets" tab displays NFTs.

Meanwhile, Apple is riding on the success of its Wallet app on iPhone or Apple Watch, which securely stores various cards, IDs and other items, allowing users to carry more while minimizing their device's size.

To Conclude

We believe that strengthening Wallet features will, in turn, aid Alphabet to solidify its Google Services segment’s performance, which constitutes the majority of total revenues.

In third-quarter 2023, Google Services’ revenues increased 10.8% year over year to $67.99 billion, accounting for 88.6% of total revenues.

Our model projects fourth-quarter 2023 Google Services revenues at $72.79 billion, indicating growth of 7.3% from 2022.

Strength in the underlined segment will likely aid its overall financial performance in the upcoming period.

Our model estimate for fourth-quarter 2023 total revenues is pegged at $81.95 billion, indicating year-over-year growth of 7.8%.

Zacks Rank & A Key Pick

Currently, Alphabet carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is Badger Meter (BMI - Free Report) , sporting Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Badger Meter have gained 39.2% in the year-to-date period. BMI’s long-term earnings growth rate is currently projected at 20.39%.

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