Apple Pay Exclusive Discounts Are 'Entirely Possible'

Apple Inc. AAPL announced that it has upgraded Apple Pay, which will soon support rewards programs and store-specific cards.

The news did not surprise analysts, which expected Apple to continue beefing up its service.

"Rewards are pretty powerful," CreditCards.com senior analyst Matt Schulz told Benzinga. "It's clear that consumers really like them. So it might not be something that might make somebody say, 'Oh wow, now I think Apple Pay is the greatest.' But if it can be something that can help keep Apple Pay in front of people's minds, it can be a significant thing -- especially if somewhere down the line there might be exclusive incentives that a Target shopper, for example, might get from using Apple Pay. Then that might be something else."

Schulz said that he thinks exclusive offers "would be entirely possible going forward."

"There would be the question of who will pay for it," Schulz explained. "I think some of that would just be done with the hope that offering that exclusive might get somebody in the store who might not go otherwise. So maybe it adds to the bottom line that way, even though you might have to give a little bit of a discount to get there."

Schulz said that this is clearly a "a first step toward the integration of rewards and loyalty cards into this just to make the experience of using Apple Pay a better one."

Related Link: Can Apple Convince Spotify Users To Pay $10 A Month For Music?

'Not A Threat'

Apple Pay's continued growth and expansion should not be viewed as a threat to the credit card industry. Global Equities Research analyst Trip Chowdhry told Benzinga that Apple is merely enabling payments through the platform.

"Apple just gave them another avenue," said Chowdhry. "It's not like Apple is becoming a bank -- it's just a technology enabler. It helps the credit card companies because they have many ways in which credit cards can be used. People are more conducive to use more credit cards if they have an iPhone."

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.