Apple Pay Details: Apple Gets 0.15% Cut of Purchases, Higher Rates for Bluetooth Payments

[alent1234]

Instead of giving Apple that .0015%, why don't they give it to the merchants, who are the ones that will have to update their systems, and that way give them an incentive. Right now, there's really no reason for merchants to want nfc payments. They have to pay more of a percentage per transactions. This is just plain greed from the top (banks and Apple) and the middle man is left out. This payment system is going to crash and burn, and .0015% of 0 is 0.

Merchants have to upgrade to be in compliance with new credit card security rules

----------

That's right, but we rarely hear the whole story. Apple is certainly among the least worst of the major US companies in this regard. I'm vary of how things can change when a service becomes widespread, and many people rely on it. There is a lot of disinformation and gaslighting going on (using half-truths) regarding surveillance and data storage, like how Apple was caught keeping deleted iCloud photos - the ones that were leaked to the public. Also how NSA can tap user information directly, even though companies say that whatever data isn't kept in databases etc. So we shouldn't take everything at face value. Don't forget that the US government (which can also strong-arm tech companies) has been caught lying about these things to the public time and time again.

Anyways, Apple is extremely capable at making practical solutions and innovations, so I will keep an eye on this technology. I've not been the biggest fan of smartphones, but being able to use one as a payment device is interesting.

Because your cc number and nudie photos will be on the same server

 

[melevittfl]

Another really good question. Often returns are handed by refunding the money to the credit card used, but with ApplePay, that credit card acentually no longer exists.

Yes, the card does exist. When you add it to the phone, Apple asks the bank that issued the card for a token that represents the card number. When you make a payment, the token is used as part of the payment information that is sent to the bank and the bank can match up the token with your account.

So, as far as you'll see, an Apple Pay transaction will look just like you used your card. it's not like Paypal with a linked card where Paypal is the one charging your card. In the Apple Pay case, you'll see the merchant name on the transaction and, if you have a dispute, it'll be between the merchant and your bank, not Apple.

 

[ptb42]

ok, this article is confusing.. so Pay can be used in any location where NFC payments are accepted? If thats the case, why is there such a big deal, i thought wall mart accepted NFC payments?

I don't think that Walmart's new terminals support NFC. In some stores, they have enabled the EMV reader, but I have never seen the NFC symbol.

One of my credit cards has NFC. I will try it the next time I buy groceries.

 

[kdarling]

Actually it's a relief to me that apple is not in the business of collecting user data and selling them to advertisers.
That is one of the key reasons why I would prefer to use apple over android.

Neither Apple nor Google sell individual user data to advertisers.

However, Apple does indeed collect user data (iTunes purchases, credit info, perferences, location, etc) and use it to sell anonymous targeted ad positions to advertisers, just like Google.

It's not just that Apple doesn't *store* the transaction details. Apple will never *see* the transaction details.

Apple might not see or store the details themselves, but it's a good bet that part of their deal with the CC providers is that they get to share the information those parties collect on our preferences and spending.

Instead of giving Apple that .0015%, why don't they give it to the merchants, ...

Heck, why doesn't Apple give us, the users, a kickback? After all, we're the ones spending the money.

It would also make Apple quite the popular device, for sure!

 

[avonord]

Instead of giving Apple that .0015%, why don't they give it to the merchants, who are the ones that will have to update their systems, and that way give them an incentive. Right now, there's really no reason for merchants to want nfc payments. They have to pay more of a percentage per transactions. This is just plain greed from the top (banks and Apple) and the middle man is left out. This payment system is going to crash and burn, and .0015% of 0 is 0.

It's 0.15%.

Attracting customers by its convenience is the incentive.

 

[Judas1]

Merchants have to upgrade to be in compliance with new credit card security rules

This is just plain robbery. Merchants are forced to upgrade their systems to make it more "secure", but they have to pay more per transactions using this new system. So only the banks really benefit. They save money with less lost due to fraud. They earn more per transactions. While merchants and to some extent, consumers, are getting the shaft.

 

[the8thark]

delete

 

[Judas1]

It's 0.15%.

Attracting customers by its convenience is the incentive.

Consumers are still going to buy what the want from the stores that they usually go to anyway. They're not going to be choosing between stores bc of apple pay.

 

[the8thark]

What's worse is all of the people that up voted his post.

Can't downvote forum spam anymore.

 

[the8thark]

Image

 

[avonord]

Consumers are still going to buy what the want from the stores that they usually go to anyway. They're not going to be choosing between stores bc of apple pay.

One major reason that ppl use credit cards is because it's convenience (and collecting points).

 

[Keirasplace]

Apple's 2013 revenue was above 40 billion.
To add 1 billion in revenue in apple pay would take transaction volume of 666 billion.
I guess 1 bn addition in revenue is certainly meaningful but it'd account for less than 2.5 percent.

As I said, the value comes from embedding retailers into its ecosystem. For that alone, they could still do this at cost and come on top.

 

[Salty Pirate]

Consumers are still going to buy what the want from the stores that they usually go to anyway. They're not going to be choosing between stores bc of apple pay.

Not true. I would.

 

[mdlooker]

They just need to get their foot in the door. Walmart and Best Buy are not on board so it will be interesting to see at what point they cry uncle and fall in line

Hmm, I don't know if Apple pay will reduce their sales significantly at any point if they don't use the system. They may conform over time but I'm not seeing a customer just plainly refusing to give business to either Walmart or Best Buy because of that.

 

[tru3north]

Consumers are still going to buy what the want from the stores that they usually go to anyway. They're not going to be choosing between stores bc of apple pay.

All things equal, I would.

 

[avonord]

There is one thing I don't get. When I use tap my visa at a payment terminal of a shoppers drug mart (think of it as Walgreen of canada) , it doesn't work. But I heard it works with MasterCard. I wonder if it's a limitation of the terminal or the credit card acquirer used by the merchant

 

[Keirasplace]

All things equal, I would.

Some thing people don'T realize is that this makes cross promotion / promotions much easier to do for the merchant, as such those involved will be able to leverage Apple to improve their marketing to potential, or existing clients.

 

[mdlooker]

I do see USAA coming around...

 

[John.B]

Yes but they can choose not to update their POS to support NFC.

But effective October 2015, retailers themselves are responsible for credit card fraud for swipe-and-sign type credit card transactions. http://blogs.wsj.com/corporate-inte...15-the-end-of-the-swipe-and-sign-credit-card/

They're going to have to implement something instead of swipe-and-sign. If not NFC, then... what?

Like I've said elsewhere, Apple's timing for supporting NFC payments is impeccable. After the sporadic initial NFC deployments, but a year before the EMV deadline. Right as merchants need to ramp up.

Instead of giving Apple that .0015%, why don't they give it to the merchants, who are the ones that will have to update their systems, and that way give them an incentive. Right now, there's really no reason for merchants to want nfc payments. They have to pay more of a percentage per transactions. This is just plain greed from the top (banks and Apple) and the middle man is left out. This payment system is going to crash and burn, and .0015% of 0 is 0.

See above.

You might want to do some research. Merchants can decide not to implement NFC payments, but in just over a year the rules change and they will begin eating fraudulent charges for swipe-and-sign credit card transactions. Punch "EMV deadline" into your favorite search engine for more information.

Also, if you think .0015% is a lot of money, banks charge merchants between 2% and 4% off the top for credit card transactions.

Lastly, why all the angst? Clearly, you aren't a merchant yourself or you'd understand this a lot better.

 

[BruiserB]

Apple Pay Details: Apple Gets 0.15% Cut of Purchases, Higher Rates for Blueto...

The discussion about the higher fees charged for Card Not Present transactions got me thinking....

Could this be a huge savings to online retailers?? Up to now I assume they are paying card not present fees for every sale. Is this true even if they get the 3 digit code from the back of the card?

Would ApplePay online transactions be counted as Card Present? Since only a token is being used, I could see this being possible.

When ApplePay was demoed with the Target App, I was kind of "meh" about it as I really haven't liked the shopping experience on my phone anyway. But I can see online retailers adopting this big time if they can save on fees. And I can also see the online shopping experience improving on my bigger iPhone. If Apple rolls this to iPads and even MacBooks, this could usher in a new level of online shopping security. I wonder what the savings to Amazon would be if they could pay card present fees instead? Not saying that would happen, but they'd be hard pressed to ignore the savings. And hopefully ApplePay is patent protected to the point where some new obscure FirePay system isn't developed by Amazon.

Edit: Just read the original post more closely....I see it says Card Not Present fees will still be paid for Bluetooth or Online Purchases. I bet Apple is negotiating to change this or has some deal that this will change if they can prove security over time.

 

[Les Kern]

One word...

Discover.
That's all we use as we get massive cash back bonuses. If we buy a candy bar it goes on it.
However, forget me.
This just might be the most important thing Apple has ever done in generating revenue.

 

[eric_n_dfw]

The fact that Apple's payment charge is based on a % cut of the purchase means I'll never use this service. That's just too greedy. It should have been a very small static fee like how VISA charges used to be. No thanks, Apple.

Why do you care?

 

[SHNXX]

Why do you care?

Lol I know right?
I hope he knows apple also makes about 40% gross margin on all their business combined.

Profit!!! How evil.

 

[Medic311]

i'll be paying with cash or credit card until i am told that is no longer possible and i must use my iPhone.

 

[Huracan]

i'll be paying with cash or credit card until i am told that is no longer possible and i must use my iPhone.

But paying with the phone with Apple Pay is equivalent to paying with a credit card I don't think phones can completely eliminate credit cards, no matter what the market share of smartphones is, not every individual is going to have one, so cash and physical credit cards will still be there for a long time. What you are saying is that you will never use your iPhone to pay. Could we have this conversation in a couple of years? Perhaps you might have changed your mind on this subject by then