Apple Pay isnt expected to launch until the end of the month. Nonetheless, Cupertinos recently announced mobile payment system is already being called the player to beat by a key analyst, according to AppleInsider.
Morgan Stanleys Craig Hettenbach told investors on Tuesday that Apples large installed base and existing infrastructure should help Apple Pay quickly gain traction in the mobile wallet space.
By reducing fraud, improving data security, and increasing credit/debit volumes for issuers and networks, while protecting the value of the existing payments value chain, we believe Apple Pay has a high chance of success.
Akey factor for Apple Pays likely success is its compatibility with the existing payment infrastructure. As such, payments can be made with bank cards from existing issuers.
Hettenbach also likes that Apple Pay works with the existing near field communication (NFC) mobile payment infrastructure, which is also compatible with the EMV (Europay, MasterCard and Visa) standard for chip cards. Companies in the United States will also be using this standard beginning in 2015 as magnetic cards are phased out.
We think Apple Pay will help kick start what has been a slow-going NFC ecosystem on both the smartphone and merchant fronts. In particular, we expect other smartphone OEMs, especially in the Android ecosystem, to adopt NFC technology for mobile payments and merchants to increasingly upgrade their payment infrastructure to support mobile payments as consumer adoption rises.
First announced last month, Apple Pay is compatible with the iPhone 6, iPhone 6 Plus, and Apple Watch. It’s expected to go live later this month with the iOS 8.1 update.