Australian Banks Hold Back on Apple Pay Support Due to Fees

[JeffyTheQuik]

He's taking a swipe at CurrentC.

Yeppers!

 

[dampfnudel]

Send Taylor Swift down there. She'll sort it out.

Only if she can get a cut of the fee.

 

[BvizioN]

I don't understand this either. I know that Apple would like to increase its revenue streams. But to me it makes more sense to simply offer ApplePay as a free option for banks -- which would mean a more rapid adoption.

Apple is not Google. Apple does not give things for free, nor have any real reason to give things for free. Sales of iPhone's are already high sky. I don't understand why the chargeable fee to use Apple pay does surprise some people here. It wasn't cost free for Apple to implement the technology to start with, why should it be free for others to use it? Apple is doing what any other smart company would do. As for the banks, they are daylight robbers and the last ones to complain about this.

 

[Solomani]

So why doesn't Apple ask for 5 or 7 cents in countries with lower interchange fees than the US? That would be the logical thing to do.

Yeah. Frankly I'd love to see Apple Pay succeed (just so it will be universally present and easy to find/access in the future)…. but even 15 cents per transaction in the USA is "expensive" cost of doing business with AP. Maybe >10 cents in US might be more reasonable. And of course even less in countries to reflect the monetary rate of exchange.

 

[ShadovvMoon]

Ugh I hate Australia sometimes. It's like how companies are banned from laying Fibre because it would compete with the governments Copper networks

 

[brownpaw]

As was reported when ApplePay first launched, a U.S. card registered on ApplePay works just fine with existing Australia contactless systems. I've been using my iPhone to pay in Australia for the last nine months. In the end it seems like a win win win for just about everyone.

 

[Yumbo]

Don't be bummed out. We've had tap and go payment in Australia for over 3 years now. For transactions under $100, you just tap your credit card on their device and that's it. Paid.
Anything over that is insert the card (chip, not magnetic strip) and PIN number. Been that way for along time.

I find it weird when I visit the USA and have to sign for my credit card purchases.

Except your card can get abused, ApplePay can't.

 

[Yumbo]

That's a fair argument, but I think in practice it's not quite as cut and dried.

It's a bit chicken and egg with Apple Pay. If not enough people use it, then there won't be much saved from fraud in the first place. The other thing is that not all fraud is equal. I rather suspect that the sort of customers that Apple Pay would attract are unlikely to suffer much fraud in the first place, so unless Apple Pay really got as mass market as credit and debit cards, it's unlikely to make much impact on fraud.

I think it must be very hard to work out just how much fraud saved can be directly attributable to Apple Pay. It's an intangible figure because of all the variables.

These, I feel, are some of the reasons why banks are not all taking it up with enthusiasm.

Australians love to tap and go.
So having a more secure single device for ALL cards would be more convenient.

 

[Yumbo]

Remember when you go to the shop and forget your wallet but have your phone?

Remember when you take your wallet but your wife borrowed your card, but have your phone?

Remember that you can give feedback to your bank that ApplePay exists.

 

[jayisblessed]

I know some people like you are just natural negative whiners. But at least Apple products work very well for most people. And their basic services are basically very good too. You are welcome to whine, for I know you enjoy it. Well, you are what you are. No one will blame you.

Sorry... but I can't see an Apple Bank working out too well if they can't even handle basic services they already run.

 

[Boatboy24]

Except the banks end up passing on those charges to the poor customer, so there is no incentive. The write offs can also be used to reduce corporate tax. So the taxpayer loses too.

If the write offs reduce corporate tax, and I'm decreasing the amount of write offs, then I'm essentially increasing corporate taxes. In that scenario, taxpayers/governments win. But the corporation wins as well. In writing off a dollar of fraud loss, the corporation is only 'saving' 15 cents in tax, for example. They are still losing 85 cents. So, taxpayer/government loses 15 cents, corporation loses 85, and the 'bad guys' gain a dollar. If I eliminate that dollar of fraud loss, the corporation saves a dollar, pays an additional 15 cents to the government/taxpayers (still an 85 cent gain) and the bad guys get nothing.

Whether or not the bank passes on the additional fees to the consumer is questionable. So far, my credit card fees and interest rates haven't budged with Apple Pay. In the above scenario, the bank would be paying Apple a small fee in order to gain that additional dollar. It is still very cash positive for them whether they pass the cost on to the consumer or not.

If I have a dollar of fraudulent activity on my credit card, the bank pays that, not me (provided it is caught). If the bank spends a penny or so to utilize Apple Pay, they can virtually eliminate the risk of losing that dollar. Seems like a good investment to me.

 

[Reason077]

Similar sort of thing in Europe. Chip & pin is already the standard, so from a retailer's perspective there's little incentive to add Apple Pay, especially with the costs of training people how to use it and buying the necessary equipment.

Chip & PIN kind of sucks though.

1. It's slow (due to having to find your card, insert it, type in pin number), and

2. It's insecure (due to potentially revealing your PIN to a fraudster)

Admittedly, Apple Pay only partly solves the first problem - it's still pretty slow to use unless you have an Apple Watch. But it does solve the second.

 

[Reason077]

that will never come to Germany. people in line already roll their eyes when you take out your card to pay. one time i tried to pay at a grocery store with nfc, not a single staff member even knew its possible at their terminal so i gave up

Surely, an NFC (contactless) transaction involves less work for the staff than a cash transaction? Even in Germany, I think convenience will eventually win out over inertia.

 

[Reason077]

but even 15 cents per transaction in the USA is "expensive" cost of doing business with AP. Maybe >10 cents in US might be more reasonable.

It's not 15c per transaction. It's 0.15% of the transaction value. And in the UK it's probably a lot less than that, because credit card merchant fees are lower in general.

 

[SvP]

I’ll be interested to try Apple Pay if I get a new iPhone this year or next.

That said, it's not the most exciting thing. I'm not convinced yet that it's worthwhile for Apple to be bothering with it. I don't see it as being beneficial to the ecosystem, nor is it a profit driver.

Are you interested as a user or as a shareholder?

As a user i want it, now. Hopefully i can leave my wallet at home in the future.
As a shareholder: low to no costs with potentially a huge huge payoff unrelated to the operating costs: i don't see the downside.

 

[SvP]

Surely, an NFC (contactless) transaction involves less work for the staff than a cash transaction? Even in Germany, I think convenience will eventually win out over inertia.

I always attributed that inertia to the unwillingness to leave a digital trace. Germans are the most privacy conscious people i know.

 

[njmh]

Apple Pay IMO adds absolutely no value to transacting in Australia. I've had PayWave on all my bank cards for well over two years and I can't imagine it being any easier using my phone instead. I've watched videos of Apple Pay being used in the US and it looks so slow (with the whole fingerprint thing). I can remove my wallet from my pocket, remove my card, tap it and return it all to my pocket in less time than I've seen people getting just their fingerprint recognised in the videos I've watched.

That's for < $100 transactions of course (no pin), over that chip and pin might me slower than Apple Pay.

 

[Reason077]

Apple Pay IMO adds absolutely no value to transacting in Australia. I've had PayWave on all my bank cards for well over two years and I can't imagine it being any easier using my phone instead.

That's basically right. The Touch ID part is enough of an annoyance that Apple Pay, in most circumstances, is less convenient than using a regular contactless card.

However, Apple Pay is more secure then either Contactless or Chip & PIN. And, of course, if the merchant has upgraded their terminal to fully support Apple Pay (CDCVM), there is no limit on transaction value.

 

[Robert.Walter]

All Apple has to do is convince banks that their competitors are gaining first mover advantage by signing up and the log jam should be broken.

If they refuse and there is one smart bank that jumps on Apple Pay, that bank should be able to leverage this USP combined with other incentives to lure customers away from non Apple Pay banks.

If this happens to any significant degree amongst desirable customers, the other banks will jump on the Apple Pay band wagon just as we are seeing in the UK with Barclays and Lloyds.

 

[MrX8503]

Yeah. Frankly I'd love to see Apple Pay succeed (just so it will be universally present and easy to find/access in the future)…. but even 15 cents per transaction in the USA is "expensive" cost of doing business with AP. Maybe >10 cents in US might be more reasonable. And of course even less in countries to reflect the monetary rate of exchange.

It's 15c for every $100 spent, not every transaction.

The fee is almost insignificant yet the banks are complaining about it.

Apple Pay IMO adds absolutely no value to transacting in Australia. I've had PayWave on all my bank cards for well over two years and I can't imagine it being any easier using my phone instead. I've watched videos of Apple Pay being used in the US and it looks so slow (with the whole fingerprint thing). I can remove my wallet from my pocket, remove my card, tap it and return it all to my pocket in less time than I've seen people getting just their fingerprint recognised in the videos I've watched.

That's for < $100 transactions of course (no pin), over that chip and pin might me slower than Apple Pay.

Apple Pay is much more secure.

 

[paulyras]

Yet somehow when I buy things in Australia using a credit card, including hotel rooms, meals, flights, etc... I routinely get hit with 2% fees for using credit cards?!?!? Who is making the rest of the money?

 

[MrX8503]

Yet somehow when I buy things in Australia using a credit card, including hotel rooms, meals, flights, etc... I routinely get hit with 2% fees for using credit cards?!?!? Who is making the rest of the money?

Credit card companies take the bulk of the profits.

The fees cover fraud, rewards, and operations.

 

[Rusty33]

I use applepay multiple times a day. I absolutely love it. I'm bummed out for Australian customers as its one of my favorite features of my watch and iPhone 6

Don't forget that in Australia we have, for years now, had 'tap & go' (NFC) built right into our credit cards. There really isn't any innovation here in oz...

 

[unplugme71]

Yes, and apple has the infrastructure that allows the banks to issue, authorize, and reissue cards without printing or mailing costs.

If it does get stolen/compromised somehow it is a button click to get a new number to the customer. Compared to AMEX printing and overnighting a new card.

yup, people don't understand what happens on the other end of the system and how it saves the card issuers money

 

[kds1]

What is up with Australia? Between this and movies....