From a note to clients by Amit Daryanani that landed on my desktop Wednesday:
ALL YOU NEED TO KNOW:.. We think the Apple Pay Later system will help drive Apple Pay adoption, meaning additional revenues for AAPL (the company receives a percentage of transactions made through Apple Pay), and importantly making the ecosystem more sticky for iOS users.
Worth noting, the new service is not expected to be tied to the Apple Card, enabling users to choose a different method of payment. We think the service will have several options, including 1) users will pay four interest-free payments, one every two weeks, or 2) users can make payments across several months with interest. However, the service is still under development, meaning plans could be changed or cancelled.
Net/net: We view the potential for an Apple Pay Later service as a positive for both driving adoption and growth within Apple Pay and the company’s larger services ecosystem.
Maintains Outperform rating and $175 target.
My take: I’m not sure Apple needs to be any stickier than it is. I can count on one hand the people I know who have abandoned the ecosystem.