Apple Pay Launching in Canada With American Express on November 17

[paul4339]

Ok. We shall see if people will desert the banks in large numbers just because their banks don't offer Apple Pay

People often have multiple credit cards.

Couldn't one just apply for another credit card with the bank that support ApplePay (instead of 'deserting' their banks)

For example, at one time, BMO was the only one that supported Mastercard (of the big six banks) and people would often hold a BMO mastercard along with their VISA from their choice bank.

I believe that Apple will do what they (and others) have often done, they will eventually win over one institution, and the other banks will jump aboard to compete.

 

[Vegasman]

Fraudulent transactions aren't "free". The cost is spread among everyone: the bank's customers and the merchant's customers. It's included in the price of everything you buy.

But a more immediate benefit: if a card number is compromised, the card must be reissued. Beyond the cost for the bank, you have to update any authorizations for periodic transactions. That's a real cost for you, at least in time.

So if you shop online and somehow your card gets compromised, won't the bank still have to reissue you a card? Isn't this where most if the compromises come from? Is certainly not from swiping my card at WalMart.

 

[Corrode]

If you're going to get an AMEX card, why waste it on a 1% cash card?

Get one of their cards with 6% back, 3% back, or with $100 airline credits each year.

Only an idiot would get a straight 1% cash back card, especially through AMEX. The cards with annual fees are a better deal.

Only an idiot would call someone an idiot for not making a different decision based on their own personal context.

"The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function.

F. Scott Fitzgerald"

 

[paul4339]

...
If there's strong demand for an Apple product or service, negotiations are typically a formality because Apple has all the negotiating leverage. I find it rather illuminating that negotiations haven't progressed with the major Canadian banks.

I think it's not only about the 0.15% transaction fee. It's about a win-win go to market strategy (for both the banks and Apple).

Airmiles Canada, (I may have some facts incorrect) I believe used Amex as an early launch pad, and expanded BMO. When it became apparent that people will pay for the privilege of collecting loyalty points, all banks jumped on to offer and *charge* the customer an increased fees just to collect points. They do the same with other things as well, like attaching disability insurance to credit cards... finding any excuse to charge the customer more.

I believe the banks may take the same approach, trying to negotiate and devise ways to squeeze more annual fees from the customer (eg, you can get ApplePay if you upgrade to our $240/yr Platinum Card!). And if the ApplePay is compelling enough, customers will upgrade.. banks win, Apple wins and customer will get their service.

 

[xero9]

I believe the banks may take the same approach, trying to negotiate and devise ways to squeeze more annual fees from the customer (eg, you can get ApplePay if you upgrade to our $240/yr Platinum Card!). And if the ApplePay is compelling enough, customers will upgrade.. banks win, Apple wins and customer will get their service.

That's an interesting one.. I wonder how many Apple Pay fanatics would still want it if it were only available on a card with an annual fee (or a higher annual fee). My guess is, given how many are complaining that they won't sign up for a no-fee Amex, probably not many.

 

[ptb42]

So if you shop online and somehow your card gets compromised, won't the bank still have to reissue you a card?

If you shop online and don't use Apple Pay, yes.

Isn't this where most if the compromises come from? Is certainly not from swiping my card at WalMart.

I don't know the exact proportions, but yes -- swiping your card at a retailer was the source of a number of high-profile breaches in the past few years. At Target, someone was actually able to install software on their point-of-sale terminals to capture card data during the brief period it was in RAM, un-encrypted.

It happened again at Home Depot, although they didn't announce the details of how it was done. And before that, there was TJ Maxx. Both breaches affected cards used in-store, rather than online.

Due to their large customer base, each of these breaches resulted in a lot of cards being cancelled and reissued. I have a friend that received a new card after using it at Target, only to have to replace the new one again because he used it at Home Depot.

 

[motodc]

Appears to be the big banks in Canada dragging their heels here...

 

[tmiw]

I don't know the exact proportions, but yes -- swiping your card at a retailer was the source of a number of high-profile breaches in the past few years. At Target, someone was actually able to install software on their point-of-sale terminals to capture card data during the brief period it was in RAM, un-encrypted.

It happened again at Home Depot, although they didn't announce the details of how it was done. And before that, there was TJ Maxx. Both breaches affected cards used in-store, rather than online.

Due to their large customer base, each of these breaches resulted in a lot of cards being cancelled and reissued. I have a friend that received a new card after using it at Target, only to have to replace the new one again because he used it at Home Depot.

Something to keep in mind is that US banks basically had no choice; the US is the world leader in credit card fraud and they needed to latch onto something, anything to try to fix it. Also helps that people will spend more the less they have to think about how to pay. Fraud is already quite low elsewhere (and there's already contactless payment on physical cards) so there's not as much urgency in, say, Canada.

I wouldn't be surprised if banks in some countries never allow NFC payments on the iPhone unless it's through their own app. Since Apple probably won't ever open that API though, NFC phone payments in those countries will probably be Android only.

 

[xero9]

Don't forget one of the added bonuses of Apple Pay.. If your card is re-issued for what ever reason, your Wallet app should be automatically updated with the new card details before your physical card arrives.

That's how it's been in the US at least..

 

[johnnymoy17]

Is it time to get an AmEx?

I wouldn't get an AMEX just to use Apple Pay. I'll wait a few more years till TD Bank and Visa sign on.

 

[paul4339]

That's an interesting one.. I wonder how many Apple Pay fanatics would still want it if it were only available on a card with an annual fee (or a higher annual fee). My guess is, given how many are complaining that they won't sign up for a no-fee Amex, probably not many.

The Canadian market is made of 6 chartered banks (and some smaller credit unions,etc ). To grow, the banks can eat each other's lunch or squeeze more money from their existing customers. Squeezing money from existing customers that are locked into their services is often easier.

So for example, if a customer puts $6K on their Visa annually using Applepay, the bank will have to fork over $6K * 0.15% to Apple.

This would amount to $9.

The bank would not care about a measly $9 if they could say squeeze an upgrade fee of $120/year OR some kind of additional service charge for $2/mo. OR increased disability insurance (which is calculated based on the outstanding balance on your credit card) OR finds some way to increase your debt to them, or per transaction charge (like they tried with Interac) etc....

Additionally their merchant visa side will an additional fee or increased percentage of say 0.5% to the merchant just to offer ApplePay... so they also find any excuse to squeeze the merchant (once again like Interac).

All this opportunity for only $9.

 

[Corrode]

That's an interesting one.. I wonder how many Apple Pay fanatics would still want it if it were only available on a card with an annual fee (or a higher annual fee). My guess is, given how many are complaining that they won't sign up for a no-fee Amex, probably not many.

Screw that. My philosophy is that I shouldn't have to pay for an annual fee just to use a credit card. They have enough other streams of revenue. That's why all my cards are no-fee.

I try to use debit at local businesses so the credit card companies don't take a %.

 

[Garbat01]

Their banks for sure. I think you overestimate how normal consumers are entrenched to Apple's services. For most people the changing their bank accounts is a "serious" thing, whereas changing phone is just more simple.

People are likely more loyal to their "banks", credit cards may be different though. My primary bank is different than my primary credit card as my bank didn't offer the credit card features I wanted (in this case the loyalty reward). I think people will switch credit cards more readily to get the features they want.

It will be interesting to see if there is an impact from this - to be honest i would consider getting an Amex if it didn't look like my credit card company was going to support Apple Pay in the near future.

 

[macnewbie91]

Screw that. My philosophy is that I shouldn't have to pay for an annual fee just to use a credit card. They have enough other streams of revenue. That's why all my cards are no-fee.

I try to use debit at local businesses so the credit card companies don't take a %.

Let me teach you a lesson --

AMEX Everyday Card
2% back at U.S Supermarkets (up to $6,000 and then 1% back). So if you spend $8,000 a year on groceries, you get $140 back.

1% back on everything else... So in addition, if you spend $20,000 a year on all other purchases, you get 200.00 back.

Total? $340 back at the end of the year.

No annual fee.

$100 sign up bonus if you spend $1,000 in the first three months.

20% bonus on cashback/points if you use the card 20 or more times a month, so (2.2 and 1.2% back)

If you use your card 20 or more times a month, you'll get: $156 back on groceries, and $240 back on everything else, totaling = $396 back in one year.

AMEX Everyday Preferred Card
3% back at U.S Supermarkets (up to $6,000 and then 1% back). So if you spend $8,000 a year on groceries, you get $200 back.

2% back at U.S Gas Stations, so if you spend $2,000 a year on gas, you get $40 back.

1% back on everything else. So if you spend $18,000 on all other purchases, you get $180 back.

50% more points if you use the card 30 or more times per month. So (4.5%, 3%, and 1.5% back)

If you use the card 30 times or more a month, you'll get: $570 back in groceries, $60 back in gas, and $270 back in all other purchases, totaling = $900 back in one year.



$150 bonus if you spend $1,000 in the first three months.

$95 annual fee.

------------------------------

Last time I checked, $900 > $396. The annual fee is worth it. There's no sense in preaching to the masses, as they have no idea how to take advantage of credit cards. Also, the fact that you use debit at small businesses to save them money is a myth, especially those with small sales. Businesses can set a minimum transaction amount on a credit card, there isn't such thing permitted with debit transactions.

 

[paul4339]

My feeling is that they will squeeze the merchant by increasing their fees to makeup for the 0.15% apple fee.

For smaller merchants (lower volumes, higher margins) they won't have a choice by to pass down the cost to the consumer... offering better, convenient services to the customer is important because they can't compete solely on price with bigger merchants (Walmart, Home Depot, Loblaws, Shoppers Drug mart).

For the big merchants (high volume, low margins), like in the U.S., they will try to put up a fight. But this may not directly affect the Canadian chartered banks offering ApplePay because the big merchant may have their own special arrangements (I'm speaking from ignorance, but that's my guess) direct with Visa.

 

[tmiw]

Last time I checked, $900 > $396. The annual fee is worth it. There's no sense in preaching to the masses, as they have no idea how to take advantage of credit cards. Also, the fact that you use debit at small businesses to save them money is a myth, especially those with small sales. Businesses can set a minimum transaction amount on a credit card, there isn't such thing permitted with debit transactions.

I presumed he was in Canada, which has a different card environment than the US. In the US (and probably Canada too--I hear Interac is almost free to accept), debit can save the merchant money. For instance, US debit is IIRC capped at 0.05% + 20 something cents, while credit fees are normally a flat fee + something like 2-3% of the transaction. Larger retailers can get better deals but the smaller you are, the less leverage you have. You'd likely see more of a difference the higher your average transaction though.

 

[macnewbie91]

I presumed he was in Canada, which has a different card environment than the US. In the US (and probably Canada too--I hear Interac is almost free to accept), debit can save the merchant money. For instance, US debit is IIRC capped at 0.05% + 20 something cents, while credit fees are normally a flat fee + something like 2-3% of the transaction. Larger retailers can get better deals but the smaller you are, the less leverage you have. You'd likely see more of a difference the higher your average transaction though.

Was trying to give him a lesson because he doesn't understand why people would want to use American Express cards with an annual fee. Just because AMEX doesn't provide the same perks in Canada as the US, doesn't mean the card issuer sucks.

 

[Jax44]

I am sorry for the misunderstanding. But I want make a point that is even 1 dollar per 100 dollar is big... Banks to process billions of dollar transaction per day, 1 dollar per 100 dollars can add up very quickly.

If you are the CEO of bank, would you accept anything that hurts your profit? No... Unless banks can find way to recoup these losses, I would not see how banks could accept.

Like I said, I care lesson about Apple Pay in Canada. It not Genna magically change way people purchase stuff...

It's .15 cents per 100.00

 

[Bocca013]

Has it even been discussed with them though?

Apparently so except there is disagreements about how much of a cut Apple would take from the big four banks.

 

[appledefenceforce]

Regardless of what Apple does or does not do to sell their service and if what they are doing is right. If the customers want Apple Pay then its the banks duty to give it to them.

I personally see Apple Pay as a service that is ten fold better than what the Banks are able to provide. All of the banks' version of mobile payment are not even close to acceptable hence they havent taken off.

Heck, until recently most banks didn't even have a decent app.

I can argue the other way that if Apple's customers want to be able to pay with their iPhone, it's Apple's duty to make it happen.

And Apple's service is not 10 fold better. It's actually late to the party. Here in Australia the biggest bank in the country has already let Samsung s4 and s5 users use the NFC in their phones for payments. Plus they also issue an NFC sticker so that all phones can use NFC payments. And NFC payments via cards have been popular here for a few years. So yes the bank mobile payment has taken off. For Apple to launch Apple Pay this late in one of its biggest markets, and this limited, and where their products are so expensive, is really a slap in the face of consumers.

 

[ipedro]

Is it time to get an AmEx?

I'm seriously considering it. I'm not a fan of credit cards though. I'd rather spend my own money rather than taking loans. With a credit card, it's just too easy and tempting to spend beyond your means.

I'm going to wait and see. We've waited this long for Apple Pay in Canada. We can wait a couple more months to see how the banks react to Apple Pay via AMEX. If it cuts into their own credit card revenues because people start getting American Express cards and stop using their bank issued VISA and Mastercards, their hand might be forced.

 

[GenesisST]

Yay for the corporate amex I mostly just use in the US...

 

[numbersyx]

I really don't see Apple Pay gaining any traction in Canada. Although I have an iPhone 6, I would still prefer to make purchases by tapping my credit card. It's much faster, easier/lighter to carry in my pocket, and no chance of a fingerprint misread. I suspect there's little to no market demand for this service, which likely explains why the Canadian banks aren't budging in negotiations.

But have you tried it with an Apple Watch??? If you have, you'll understand the convenience of paying...

 

[jm001]

I am sorry for the misunderstanding. But I want make a point that is even 1 dollar per 100 dollar is big... Banks to process billions of dollar transaction per day, 1 dollar per 100 dollars can add up very quickly.

If you are the CEO of bank, would you accept anything that hurts your profit? No... Unless banks can find way to recoup these losses, I would not see how banks could accept.

Like I said, I care lesson about Apple Pay in Canada. It not Genna magically change way people purchase stuff...

If it's going to make people use the terminals more and thus use their cards more then the banks won't be hurting. How can it hurt if it makes shopping easier for someone and therefore be used more? I would think they would rake in more $$.

 

[jm001]

I really don't see Apple Pay gaining any traction in Canada. Although I have an iPhone 6, I would still prefer to make purchases by tapping my credit card. It's much faster, easier/lighter to carry in my pocket, and no chance of a fingerprint misread. I suspect there's little to no market demand for this service, which likely explains why the Canadian banks aren't budging in negotiations.

Well, in my experience with tap, I have had a few misreads at the terminal with my card. So using your card isn't as consistent as you might think. Sometimes you have to tap 2 - 3 times before it reads properly (usually 2 x). As for market demand there probably is demand since CIBC put out there own payment app which uses NFC, but it's only for certain Android phones and Blackberry. I wrote an e-mail to CIBC asking about why they don't have ApplePay and all I got was a reply about their mobile payment system.