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

[Rocketman]

I received an unsolicited email from Wells Fargo today, one of my banks.

Dear (Rocketman),

Life is mobile. Increasingly, we're connecting, sharing, and making our way through the day with the help of our mobile phones. That's why we're excited to be part of Apple PayTM.

Apple Pay allows you to store and use your Wells Fargo credit or debit card in a digital form in the new iPhone® 6 and iPhone 6 Plus — making on-the-go payment simple and convenient. With Apple Pay, this technology will be available at over 200,000 stores, restaurants, and more in the near future.

A simple, secure1 way to pay for Wells Fargo card holders

We've worked with Apple to ensure you can take advantage of this convenient new way to pay. Your Wells Fargo card and Apple Pay let you:


Add your card simply by using your iPhone 6 or iPhone 6 Plus camera
Make contactless payments in person at participating stores
Authorize payments with just the touch of your finger using Touch IDTM
Benefit from Zero Liability protection1 against liability for promptly reported unauthorized card transactions


Apple Pay will work with most of our consumer and small business cards, including Wells Fargo Visa®, and Wells Fargo MasterCard® Credit, Debit, and Prepaid cards, and with our new Wells Fargo Propel American Express® cards.

Apple Pay is another way we’re working to make access to your money safe and simple whenever and however you need it. We’ll keep you updated on this exciting new technology as news becomes available in the coming weeks.

Wells Fargo and Apple Pay. Together, we’re making payment simple.

Read the Wells Fargo and Apple Pay Press Release

Visit Apple for more about Apple Pay

 

[Glassed Silver]

So, _if_ by using Apple Pay, I have to pay more, why wouldn't I choose to use my debit card instead? I'm a legal citizen, so I'm still required to have my ID on me at all times.

My wallet isn't going anywhere.

Or are you saying that every single product and store will have the apple pay tax pre-built in, no matter what?

----------


Good point. I do see that at gas stations. But what I see is that if you use debit, there isn't a fee, but using credit there is.

So... Gas stations in states where it's legal.
Pre apple pay era.

I guess my point is that _if_ apple pay costs the consumer something, it's not like apple is the first: gas stations are already doing it.

----------



That's my whole point.
Someone was trying to say, "can't wait to pay the apple tax".

So, what you're saying is, we are already paying it. I'm saying, what's _really_ going to change?

If Apple makes profit from this, where do you think their money will be coming from?
Of course this will be integrated into anyone's price adjustment meetings in the next session of anyone who's paying for this - or should I say, channeling the costs.

Of course it will be a small part, I don't think it will be as much as what Paypal is asking, but still, it will be there and you will pay for it.
On the other side you buy comfort by this, so there's that.

I'm not judging, I'm merely saying that this service isn't free to you, directly maybe yes, but not indirectly.

Glassed Silver:mac

 

[BaldiMac]

If Apple makes profit from this, where do you think their money will be coming from?
Of course this will be integrated into anyone's price adjustment meetings in the next session of anyone who's paying for this - or should I say, channeling the costs.

Of course it will be a small part, I don't think it will be as much as what Paypal is asking, but still, it will be there and you will pay for it.
On the other side you buy comfort by this, so there's that.

I'm not judging, I'm merely saying that this service isn't free to you, directly maybe yes, but not indirectly.

Glassed Silver:mac

Early speculation is that the money will be coming from the reduction in risk for credit card companies that Apple will bring to each Apple Pay transaction.

Whether or not credit card companies will pay Apple more than they will save through reduced fraud claims is not known. So we don't know if there will be any indirect cost to the consumer.

 

[AllieNeko]

So, _if_ by using Apple Pay, I have to pay more, why wouldn't I choose to use my debit card instead? I'm a legal citizen, so I'm still required to have my ID on me at all times.

My wallet isn't going anywhere.

Or are you saying that every single product and store will have the apple pay tax pre-built in, no matter what?

Nothing's going to change, merchants will pay the same insert/tap/swipe fee they already pay. There may even end up being contactless incentives like there are in parts of Europe, who knows?

Also, I think you meant "alien" instead of "citizen" - the only people required to carry ID in the US (and other Anglophone countries, it's part of our shared tradition) are aliens, citizens do not.

 

[Toltepeceno]

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.

THAT"S the big question. With the apple tax it may be more than others charge unless the deal includes the card companies taking a hit.

----------

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.

In many places in the us you DO pay a fee, I saw places in the us that charge for using a cc, example being some gas stations. In most states in the us surcharging is not banned, I see you are in ca and it's one of the states where it is, but even at that some places legally offer discounts for cash. I'm not sure why it would surprise you, but even if not charged up front with square the price is adjusted to cover it. That's just how it works.

http://www.cardfellow.com/blog/checkout-fees-charging-credit-card-fees-to-customers/

States Where Merchant Surcharging is Banned

If your business operates in any of the 10 states (CA, CO, CT, FL, KS, ME, MA, NY, OK, TX) whose state laws prohibit surcharging, you may not charge checkout fees in that state. However, if you do business in multiple states, you may still surcharge credit card transactions in those states where the practice is not banned.

Hawaii, Illinois, New Jersey, and Rhode Island all have legislation pending that will ban surcharging if passed.

Finally, there is a loophole in these state laws which allow you to offer a discount to customers who pay by cash or check. Many gas stations, for example, already engage in this practice.

 

[the8thark]

Maybe I misunderstood the concept, but I thought ApplePay would be used instead of the physical card?

You are correct. But the card still exists with Apple Pay. It's just a virtual card now which you access through your iPhone.

 

[Glassed Silver]

Early speculation is that the money will be coming from the reduction in risk for credit card companies that Apple will bring to each Apple Pay transaction.

Whether or not credit card companies will pay Apple more than they will save through reduced fraud claims is not known. So we don't know if there will be any indirect cost to the consumer.

Fair point, but I'd like to think they'd rather make this a profit margin times 2 than share their benefits.
But you're right, it remains to be seen - or not, I doubt they will tell us.

Glassed Silver:mac

 

[cjmillsnun]

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.

It's the former. The symbol used is the same as the UK contactless symbol.

 

[Tech198]

ok, so Apple's not charging a fee themselves, like Paypal does. Instead Apple's just passing the "free" onto its customers for convenience...

Makes sense. but why would Apple want a higher free than what banks already charge for other bank transactions?

Wouldn't that have a negative effect, and say I'm not gong to use Apple Pay. Its good technology, but every time i use it i get charged more."

This is why i only use my own ATM branch to get money out ... $0 fee

Being a middle-man, makes thing more complicated,,, one wants to charge, the other has other ideas, but must comply.

 

[AllieNeko]

It's the former. The symbol used is the same as the UK contactless symbol.

It isn't a UK symbol. It's an international symbol owned by EMVco

 

[Tech198]

If Apple does make a profit from this, why would people really care how much, (as long as it's not a huge difference), the cheaper, the better, but if Apple does a profit, people will use it regardless, since it's more convenient..

And anything convenient will be used .

 

[Medic311]

Apple has now become the middle man's middle man in credit card transactions

 

[alphaod]

This is good.

I tried using Google Wallet for a while, but the fact that I had to use a bank account to fund it or pay some ridiculous fee meant my experiment was short lived. I was hoping with the Google Wallet Mastercard, I would somehow be able to use my Amex at MC/Visa only locations. Wishful thinking I guess.

Apple Pay looks more promising, but of course it's probably not going to work in China.

 

[AllieNeko]

This is good.

I tried using Google Wallet for a while, but the fact that I had to use a bank account to fund it or pay some ridiculous fee meant my experiment was short lived. I was hoping with the Google Wallet Mastercard, I would somehow be able to use my Amex at MC/Visa only locations. Wishful thinking I guess.

Apple Pay looks more promising, but of course it's probably not going to work in China.

Umm, no, you're describing the Google Wallet prepaid card. Not the Google Wallet mobile NFC product. You can add any card you want, no fees, and you can use your Amex at Mastercard-only locations if they support contactless.

 

[cjmillsnun]

It isn't a UK symbol. It's an international symbol owned by EMVco

Fair point, well made. Either way it is the symbol used for the standard NFC payment system used by EMVco.

 

[kappaknight]

I can see banks removing rewards for transactions that utilize Apple Pay if they are also having to pay Apple as well. To put it simply, if the amount the collect for swipe/transaction fees goes down due to paying out to Apple, then the amount they will allow to pay out to customers in the forms of rewards will also go down.

However, I'm not privy on all the details of who pays who for what so my worries may be unwarranted.

Banks still make a killing on the CC swipe, and even more so on the interest from those that don't pay their cards in full every month. They definitely want you to use this option over debit cards. While they do have to pay Apple 15 cents for every $100 spent, I suspect what they're banking on, is how much easier impulse buying will be with Apple Pay; both online and off-line. It'll be worth it to them, and reducing fraud will also be worth it for them. Just imagine the number of people they can let go from their claims dept. if the new way of paying for stuff actually knocks out a few % in chargeback claims?

OK but not every business will use a terminal due to fees.

Very true... a lot of people already don't carry cash, and once we're in this new wave, a good number won't even carry cards. At some point, these smaller merchants will need to figure out if the pros of avoiding fees outweigh the cons of inconvenience.

ok, so Apple's not charging a fee themselves, like Paypal does. Instead Apple's just passing the "free" onto its customers for convenience...

Makes sense. but why would Apple want a higher free than what banks already charge for other bank transactions?

Wouldn't that have a negative effect, and say I'm not gong to use Apple Pay. Its good technology, but every time i use it i get charged more."

This is why i only use my own ATM branch to get money out ... $0 fee

Being a middle-man, makes thing more complicated,,, one wants to charge, the other has other ideas, but must comply.

I suspect you have absolutely no idea how this whole thing works. (But don't feel bad - unless you run a store, most people don't know how the merchant account side works.) Apple isn't taxing customers. Apple isn't charging anything extra to the merchants who process credit cards. Apple is charging the banks 15 cents for every $100 the consumer spends for the convenience, and fraud prevention. Because of the way the system works, Apple has actually negotiated better rates for merchants so card-less transactions can get the same rate as having a card present for swipe. What this means is that smaller online merchants, or app developers who may otherwise pay a higher fee with other merchant accounts can now pay a lower fee with Apple Pay. It's a win-win for them.

On a side note, if you bank with USAA or Schwab, you can withdrawal money from any ATM and get your fees reimbursed. That way you don't have to drive a few extra miles to save $3.

 

[PinkyMacGodess]

Given they are skimming from a group of corporations that will lie and cheat to keep money in their hands, I'm surprised Apple Pay is still a thing. There has to be a reason so many cards are going with it. It is convenient. I've impressed the heck out of more than a few people when they see how easy it is.

 

[I7guy]

Given they are skimming from a group of corporations that will lie and cheat to keep money in their hands, I'm surprised Apple Pay is still a thing. There has to be a reason so many cards are going with it. It is convenient. I've impressed the heck out of more than a few people when they see how easy it is.

Like Google should give away android for free? They make billions off android, why shouldn't Apple make a buck from Apple Pay? Even if it's from tightwads?

 

[thermodynamic]

Almost the inverse of what was known as "Itchy and Scratchy Money".

Anyway, people will eventually remember why banking was done on a national level, before select entities could skim quaint 2.5% per-transaction swipes, thus leading to higher product and service prices as a result?
[doublepost=1472143845][/doublepost]

Given they are skimming from a group of corporations that will lie and cheat to keep money in their hands, I'm surprised Apple Pay is still a thing. There has to be a reason so many cards are going with it. It is convenient. I've impressed the heck out of more than a few people when they see how easy it is.

Dumb people down, then blame 'em for being dumb...
[doublepost=1472143934][/doublepost]

Nothing's going to change, merchants will pay the same insert/tap/swipe fee they already pay. There may even end up being contactless incentives like there are in parts of Europe, who knows?

Also, I think you meant "alien" instead of "citizen" - the only people required to carry ID in the US (and other Anglophone countries, it's part of our shared tradition) are aliens, citizens do not.

Except when the Visa and Mastercard and big bank lobbyists try to stop Apple from doing the same things. Which hasn't happened yet, so as usual I'm talking conjecture...

 

[PinkyMacGodess]

Like Google should give away android for free? They make billions off android, why shouldn't Apple make a buck from Apple Pay? Even if it's from tightwads?

Chill dude/dudette...

I'm just surprised the banksters agreed to this, knowing that Apple doesn't come cheap...
[doublepost=1472171087][/doublepost]

Dumb people down, then blame 'em for being dumb...

So, I'm 'dumbed-down'? Watch what you say, *******! I love the 'elegance' of Apple Pay. I step up, press the button twice, and *ZING*, I'm on my way. No scanning QR Codes, no text messaged 'key', it just freaking WORKS!!!

There is, often, a certain elegance in being 'dumb'... Dumb works... (Well, except for one political candidate to remain unnamed)

 

[I7guy]

Chill dude/dudette...

I'm just surprised the banksters agreed to this, knowing that Apple doesn't come cheap...
[doublepost=1472171087][/doublepost]

So, I'm 'dumbed-down'? Watch what you say, *******! I love the 'elegance' of Apple Pay. I step up, press the button twice, and *ZING*, I'm on my way. No scanning QR Codes, no text messaged 'key', it just freaking WORKS!!!

There is, often, a certain elegance in being 'dumb'... Dumb works... (Well, except for one political candidate to remain unnamed)

I was just asking a question...obviously the thinking is there might be something to gain rather something to lose. And I am a guy, not a dude. But I'll give you a pink smiley face.

 

[maxsix]

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

Yes Indeed!

Apple monetizes products and services brilliantly. Too bad they're so self absorbed that they've stopped delivering the world class products they're capable of. Coasting along, profit taking while hyping everything, they're masters at locking in customers.

 

[Abazigal]

Given they are skimming from a group of corporations that will lie and cheat to keep money in their hands, I'm surprised Apple Pay is still a thing. There has to be a reason so many cards are going with it. It is convenient. I've impressed the heck out of more than a few people when they see how easy it is.

There are some things only the devil can offer.

 

[PinkyMacGodess]

Yes Indeed!

Apple monetizes products and services brilliantly. Too bad they're so self absorbed that they've stopped delivering the world class products they're capable of. Coasting along, profit taking while hyping everything, they're masters at locking in customers.

And their international tax schemes are just the most ballsy thing I've seen in a long time... 'We'll pay what we want to pay, WHEN we want to pay it!' is pretty amazing. I mean, almost as amazing as one candidate...