Apple has agreed a \$356m (£226m) deal to buy fingerprint reader AuthenTec in what is seen as a bid to strengthen its digital security capabilities.
The iPhone and iPad maker's acquisition comes as consumers use their smartphones for more and more daily activities, including shopping.
"As cellphones become essentially credit cards, consumers will look to secure them in the event of theft or loss.
"AuthenTec's fingerprint sensors offer one way to secure handsets," said Raymond James analyst J. Steven Smigie.
Apple has not revealed its plans but rival devices running Google's Android system are starting to come with a wireless technology that can let phones make payments with the tap of a reader.
Apple's patent applications hint at an interest in the technology, known as near-field communications.
But the company has given no clue when the technology might appear in iPhones. A new model is expected in the autumn.
Beyond protecting payments, a fingerprint system could keep unauthorised people from accessing email, contact lists and more.
Current phones offer protection through passwords, which can be guessed or forgotten.
AuthenTec, which is based in Melbourne, Florida, said Apple is paying \$8 (£5) for each of its common shares, a 58% premium to their closing stockmarket price on Thursday.
AuthenTec's stock jumped \$3.27, or 65%, to \$8.34 (£5.29) in Friday afternoon trading, above Apple's offer. Apple shares also rose 1.8%.
The deal was unanimously approved by AuthenTec's board. It still requires approval from a majority of the holders of the company's stock.
A higher offer for AuthenTec is possible.
In a regulatory paperwork, AuthenTec said it is not allowed to actively seek other offers, but it could hold talks with other parties before its stockholders approve Apple's buyout terms.
If AuthenTec does accept a better offer, it would have to pay a breakup fee of approximately \$11m (£7m).