CREDIT SUISSE: Apple will never catch Venmo (PYPL)

Iphone money cash

Apple released Apple Pay Cash on Monday in the US.
Credit Suisse says it poses no threat to PayPal’s entrenched Venmo business.

Apple released Apple Pay Cash on Monday, which allows US users with an an up-to-date iPhone to send money to other iPhone users through the company's Messages app.

It’s been touted as a Venmo-killer, and wants to compete with both PayPal and Square Cash, but Credit Suisse isn’t convinced it nor Samsung’s recent patent for a similar payments product will make a dent in PayPal’s niche.

"We do not see these as meaningful threats to PayPal (which has first-mover advantage)," analyst Paul Condra said in a note Monday. “We believe the more important takeaway is validation of the social payments model pioneered by Venmo and the expanding ways in which internet companies are integrating payments to bolster the functionality of their platforms."

The bank maintains its outperform rating for PayPal, which bought Venmo’s parent company for $800 million in 2014, as well as its price target of $85 for the stock — 20% above where shares were trading Tuesday morning.

"We view Apple Cash like we view Zelle and Square Cash (SQ), all will find unique use-cases that cater to niches, but PYPL will continue to benefit from first-mover advantage," the bank said.

Shares of Paypal are up 75.74% so far this year. Wall Street analysts polled by Bloomberg believe the stock could reach $80.55 in the next year.