Apple to Collect Fee From Banks for Every Purchase Made with Apple Pay

MacRumors · Sep 10, 2014

Apple will collect a fee from banks every time consumers use the company's new Apple Pay payments solution, reports Bloomberg. Citing three individuals close to the matter, the report notes that Apple struck individual deals with each bank it has partnered with. Those banks include JPMorgan Chase, Bank of America, Citigroup, and more.

While that gives the tech company a share of the more than $40 billion that banks generate annually from so-called swipe fees, lenders expect to benefit as consumers spend more of their money via mobile phones and other digital devices, the person said.

The sources cited did not specify the exact size of the fee, noting that it could vary or be tied to the value of the purchases made by the consumer. During its announcement today, Apple stated that Apple Pay would be enabled at over 220,000 U.S. merchants including McDonalds, Macy's, Walgreens, Nike, and more. Apple Pay will also be compatible with American Express, Mastercard, and Visa credit and debit cards.

Apple Pay utilizes the Touch ID fingerprint sensor, a new "Secure Element" functionality, and the NFC antenna on the iPhone 6 and iPhone 6 Plus in conjunction with a credit card stored on iTunes to make payments. Apple Pay will also be compatible with the Apple Watch when it launches early next year.

Article Link: Apple to Collect Fee From Banks for Every Purchase Made with Apple Pay

farewelwilliams · Sep 10, 2014

Apple has yet to...Discover It.

Jsameds · Sep 10, 2014

If there's one thing Apple are good at - it's making money.

sputnikv · Sep 10, 2014

That's unprecedentedly huge. I cannot fathom the amount of money this will generate for them.

miamialley · Sep 10, 2014

I'm switching back from Android in part because I think Apple got mobile payments right with this.

appleguy123 · Sep 10, 2014

Is Apple Pay compatible with the hardware that some stores and gas stations have to wave cards (or other phones I assume) over the terminal to pay? Or does it require special Apple hardware?

I hope it's the former, because of most of the stores around me already have those machines.

OtherJesus · Sep 10, 2014

Lol at people dumping their stocks today.

the8thark · Sep 10, 2014

farewelwilliams said:
Apple has yet to...Discover It.

Piss poor attempt at a joke.

***********

The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.

brinary001 · Sep 10, 2014

Apple will be making "bank" (<<<

) with this whole mobile payments thing. It hasn't even launched yet, and they've already made quite a bit of money from the brand placement. Or at least I would assume that given how many times I saw a Bank of America or AmEx card during the keynote today.

the8thark · Sep 10, 2014

Jsameds said:
If there's one thing Apple are good at - it's making money.

Very true.

OtherJesus · Sep 10, 2014

the8thark said:
The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.

Are you currently paying fees to use your debit/cc card?

Didn't think so.

It's the merchant paying the fees for the convienience of accepting debit/cc cards.

Ever heard of Square? That's just one example.

andy9l · Sep 10, 2014

In the UK the limiting factor of NFC is a £20 maximum bill/total, for obvious reasons.

Would Apple Pay overcome that, or am I still limited to £20 payments? That is, if it reaches the UK.

pjwal · Sep 10, 2014

Ripe Market for Apple

This was so perfectly ripe for Apple and, imho, the biggest of their product announcements today. The whole payments industry is so completely ripe for exactly what they are doing. There really is no reason for credit card #'s if you think about it. How many times have we all been voicing our credit card #'s over the phone, aloud, etc.

It's impressive that Apple was able to get agreements from the major payment industry players, but what were they really prepared to do? It's analogous to digitization of music, but on a much grander scale.

~paul

fermat-au · Sep 10, 2014

Apple to Collect Fee From Banks for Every Purchase Made with Apple Pay

Apple one step closer to becoming Big Brother

macs4nw · Sep 10, 2014

Jsameds said:
If there's one thing Apple are good at - it's making money.

Nothing wrong with that. It's the American dream.

Tom in London · Sep 10, 2014

Pay

Yes, it's all about paying. Money. Apple wants your money and hey, isn't that great?

HiRez · Sep 10, 2014

They'll make a good bit, but I'm not sure it'll be that huge, in a relative sense. Given that the entire market for these fees is $40B annually and Apple already makes more profit than that in a year. And they will only be getting a (probably small) percentage of those fees, from a percentage of those customers (what those % are, we don't know yet, but it won;t be all of them).

Tom in London · Sep 10, 2014

the8thark said:
Piss poor attempt at a joke.

***********

The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.

Not if you don't buy anything

----------

Yes, and won't it be great when someone hacks into your phone and starts buying all kinds of stuff?

patrick001 · Sep 10, 2014

sputnikv said:
That's unprecedentedly huge. I cannot fathom the amount of money this will generate for them.

Absolutely. This is something Steve Jobs would be proud of most definitely. Very shrewd and far-reaching.

macs4nw · Sep 10, 2014

the8thark said:
…..The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.

Processing credit cards was never free. Whatever it was, we were almost certainly paying it before.
The fees were just going to a different place.

teoreticar · Sep 10, 2014

Wow I think Apple Will have 200 billion in cash on their debit acc mid next year.

downpour · Sep 10, 2014

When Tim was going on about other companies failing because they just try to make money out of these sort of payments, I genuinely thought he was about to announce Apple had created an open standard...

Nope, they are just trying to make money from it, just like those 'bad' people he was describing, LOL.

brdeveloper · Sep 10, 2014

Wow...

A tax system inside a tax system inside a tax system inside...

-----------
Someday in the future we'll pay more taxes for virtual money management than to the government.

the8thark · Sep 10, 2014

macs4nw said:
Processing credit cards was never free. Whatever it was, we were almost certainly paying it before.
The fees were just going to a different place.

Yes but now we will be paying the bank fee for using the card and the Apple fee for using Apple Pay.

CarpalMac · Sep 10, 2014

Jsameds said:
If there's one thing Apple are good at - it's making money.

Just think of how many phones will need repairing / replacing as well as people swing them out to swipe them whilst trying to gather their shopping and drop them. I have fumbled my credit card a couple of times so something as heavy as a (larger) phone with my thumb rests only on the bottom?

Even more revenue.

Apple to Collect Fee From Banks for Every Purchase Made with Apple Pay

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