Whatever the potential additions for Apple's service revenue, this seems like it will be a highly effective weapon to add to the arsenal for customer retention.

Whatever the potential additions for Apple's service revenue, this seems like it will be a highly effective weapon to add to the arsenal for customer retention. Switching to an Android phone at your next phone upgrade cycle will be a lot harder if it also means you need to switch your credit card. Plus, giving users a better rewards rate for using Apple Pay over the physical credit card will encourage them to build the habit of paying with their actual iPhone (and as a follow on effect, probably help encourage further Apple Pay adoption among merchants). Smart defensive move as device manufacturers face an ever more saturated market.