Apple is the mobile-payments elephant in the room

SAN FRANCISCO (MarketWatch) Apple Inc. is the elephant in the room when it comes to the mobile payments market, where it could potentially become a major player and a serious threat to PayPal and eBay, an analyst said Wednesday.

Apple AAPL, -0.83% is expected to also unveil a mobile payments platform on Sept. 9, in addition to a new version of the iPhone and its own smartwatch device.

For years, Apple was seen as the elephant in the room with respect to mobile and online payments, and the source of speculation around the presumed launch of a consumer payments iWallet, Baird analyst Colin Sebastian said in a note.

While there is no shortage of competition in payments, we view Apple as perhaps the most legitimate potential threat to PayPals strong position, he added.

Mobile payments is a growing market that has drawn major competitors led by eBay, which owns PayPal, Google and Amazon.com. The mobile payments market is expected to reach $1 trillion globally by 2017, Sebastian noted, citing data from IDC.

With more than 800 million iTunes accounts, Apple is well-positioned to expand its presence in that space, Sebastian said.

The company has a strong base of existing customers that it could leverage for mobile payments, he added.

We believe Apples closed-platform, software expertise, and brand power position it well, he added. Additionally, integration with its anticipated wearable device could be a key feature. We believe mobile payments could be a significant opportunity.

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Apple is the mobile-payments elephant in the room