Craig Federighi, Apple Inc. Senior Vice President of Software Engineering Speaks on Stage During an Apple Event in San Francisco
Craig Federighi, Apple Inc. Senior Vice President of Software Engineering speaks on stage during an Apple event in San Francisco, California. Reuters Reuters

Apple Pay marks a revolutionary move from Apple to extend its services more than the usual mobile features. Despite mixed reactions about the technology, analysts see that the payment system to become more popular driving iPhone loyalty more than direct revenue - still a winning bargain for the company.

Apple Pay's impact may be measured better through hardware sales as opposed to direct revenues according to Seeking Alpha. The idea is comparable to what Apple did with iTunes. Previously, iTunes only counted as a break-even operation instrumental in hardware sales.

Seeking Alpha further predicts the platform to generate limited direct revenue as Apple earns only 0.15% from transactions. In several years, the system can earn around $55 million to $165 million depending on its progress. Nonetheless, its biggest potential is in the retention rate. The system can be influential on Apple's profits as it drives loyalty to device usage.

Retentions rates have always been important among smartphone manufacturers. The higher the retention rate, the easier it is for companies to introduce upgrades without compromising adoption. According t o WDS survey, around 76% of iPhone users switch to another iPhone whereas the retention rate for the product line is at 78%. If Apple Pay can become an indispensable feature to users, this can increase their loyalty towards the product series.

Apple Pay may not be a long way off as Slash Gear reports its increasing popularity in McDonalds and Walgreens. The payment system has been active the most at Walgreens and McDonalds'. For instance, in 14,000 McDonald's locations in the United States, Apple Pay accounted for 50% of all tap-to-pay transactions. Walgreens, on other hand, claims that following Apple Pay, their mobile payments surged. Walgreens has 8,000 drugstores.

Joining McDonalds and Walgreens, Whole Foods also saw a surge of mobile payments through Apple Pay. For instance, the company claims that it has recorded 150,000 payments through the system. This accounts for about 1% of all transaction types.