Why Apple Pay could be big: Analyst

Apple Pay success solidifies Apple ecosystem: Analyst
Apple Pay success solidifies Apple ecosystem: Analyst

Apple Pay may be a small part of the tech giant's portfolio, but since launching in October, it has quickly become the biggest driver of mobile payments for its partners, Robert Baird's senior research analyst told CNBC on Friday.

Apple's cashless transactions service now accounts for two-thirds of all U.S. mobile payments, Baird analyst Will Power said. Whole Foods has seen smartphone transactions surge 400 percent since it integrated Apple Pay, and Apple now accounts for 80 percent of mobile payments at Panera.

"There are still a limited number of vendors that are supporting it, but our expectation is that's going to continue to grow just given the early success the early vendors are having with it," Power said in a "Squawk Box" interview.

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To be sure, Apple Pay likely drums up only a couple billion dollars in revenue and is a small piece of the puzzle for the company, he said. Apple reported net sales of $183 billion for 2014.

The service's real value is in solidifying Apple's ecosystem of devices and services, he said.

Its success thus far is also a sign that Apple continues to out-innovate its competitors, he said, noting that Google has not introduced a mobile payment process into its Android operating system in any successful way.

"Right now, the Apple iPhone—hard to believe—seven years later or so is as well positioned competitively really as it's ever been," he said.

—CNBC's Melody Hahm contributed reporting to this story.