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

OtherJesus said:
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.
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The merchant usually passes those fees to the customer, for example credit pricing being higher than debit at gas stations. People just accept it, been that way forever.

Apple pay is not going to cause a revolt by consumers, they'll just eat it like they do with every other fee if they want to use it.
 
I doubt this will be an additional fee for end users, the banks are probably looking at this as giving Apple a small cut out of the fees that they make already. If the system is half as secure as it appears what they will be paying out to Apple is a lot cheaper than the anti-fraud measures probably cost the banks anyways.
 
Diode said:
Well technically he's correct. Except it's the merchants passing the fees on to the consumer. Prices are typically cheaper in stores that are cash only.
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Please, oh please- give me a source for this information. Also, supply me with a list of stores that are cash only.
 
Digital Skunk said:
Definitely need DD to be added.

For me it's (please forgive it these are actually supported)

MicroCenter
BestBuy
DXL (Imma fat guy)
Burlington Coat Factory
Quiznos
Chipotle



The adoption rate wouldn't have to be 90% . . . . not even 70% to be honest. If it was 40%, and just in the places that the target demographic shops then it will be a hit.

Even in this high credit nation of ours we still have to carry cash for various things. Apple Pay just makes it a little easier for us to NOT have to pull out our wallets and swipe and drop it and loose it.
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Well I meant for me its not worth it until its at 90%.

im sure it'll be a hit regardless.
 
tripmusic said:
The banks will most likely charge merchants a slightly higher percentage, which will wind up in Apple's hands
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No, the merchant fee is the same. The banks are accepting a slightly smaller fee for the purchase (partly because Apple has convinced them it is more secure than a credit card), and Apple is getting the difference.

It's a very small percentage, but I think it will add up to a large number once NFC adoption is widespread.
 
BigBeast said:
Please, oh please- give me a source for this information. Also, supply me with a list of stores that are cash only.
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Many stores in nyc are cash only. Not major dept stores of course but small to medium sized stores and pizza parlors and Chinese food spots!
 
mtneer said:
I am still not clear on this. With a plastic card, there are three entities involved in the transaction between the customer and the merchant: the bank, the card processor (Visa/ MC etc.) and the sale terminal owner.

How will Apple Pay simplify this transaction? Will it simply not inject Apple into the middle man role and increase overall transaction cost, borne by the customer at the end of the day - even if it's indirectly through the bank or the merchant?
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Well there is always a middle man. When a merchant signs up to take credit cards they don't deal directly with the credit cards but with a 3rd party clearing house / payment processor that provides you a terminal and makes money by charging a small premium over what credit cards charge them. Square is an example of this (as is Paypal).

If I understand this correctly, Apple is acting as that 3rd party clearing house. When a payment is made at a terminal via NFC Apple will then connect the merchant with the credit card companies and charge a small premium. I'm assuming that fees will be in line with what merchants already pay (although it's possible transactions might be cheaper via :apple:Pay) so there should be no real cost increase to merchants.
 
If you buy something in a store with cash, you're still paying extra for people who use credit cards. The store works the fees into the price of all their items. That bag of chips costs $2.39 no matter how you pay for it. You're not going to see an extra line item "Apple Pay Fee".

You might find a store that gives a discount for paying cash on a large item, but those are few and far between these days. Credit card merchant agreements forbid stores for charging extra when using a credit card.
 
The merchants might pay for the fees and then pass those fees onto the consumer through higher prices, but if you're using the right credit cards you make that money back and usually then some. I get 1%-6% cash back with my credit cards depending on where I'm shopping and what card I'm using. The only people losing out are those paying cash because most of the time they aren't getting cheaper prices on their goods for doing so. I can't remember ever being in a place that takes cash only and the only place I remember shopping where an extra fee was charged to credit card users was a liquor store. YMMV of course but in most cases credit cards are superior to paying with cash due to rewards that allow you to recoup any transaction fee price markup on goods.
 
downpour said:
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. :p
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This is the kind of crap that drives me up the wall. You have no idea what the financial structure of this deal is. Yet you're spouting drivel about how Apple, a publicly traded, for profit company is trying to make money.

You're either deliberately being obtuse, or you don't have the ability to comprehend the subtlety of what he said. He stated that the reason "e-wallet" initiatives have failed in the past is because the ones trying to implement it always come from a standpoint of self interests, instead of approaching it first from a standpoint of user experience. And that's what it's all about. Almost anyone would be willing to pay a small, incremental cost to make their day to day activities more convenient, secure and simple. And that is what Apple is trying to do with this initiative.

Sure, Apple will make some money from the transactional costs, or be able underwrite the infrastructure that they will outlay for this service. But the potential benefits to the consumer and the financial industry are huge. Why? Because Apple thought through and is implementing a system that makes the process of credit card transactions convenient, simple and secure for the consumer, while providing increased security for the businesses involved. And I would be willing to bet that the eventual result will be decreased costs for the financial industry and the retailers because of saved time per transaction, less infrastructure for printing receipts and a huge reversal in fraud.
 
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BigBeast said:
Please, oh please- give me a source for this information. Also, supply me with a list of stores that are cash only.
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All kinds of examples of this - merchants that require a minimum for credit card payments, gas stations that have cheaper cash prices vs. credit card prices, merchants that don't take American Express (they charge the highest fee of any credit card), etc etc.
 
downpour said:
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. :p
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Everything he said was accurate. It is an open standard. ANYONE can add NFC to a device for payments.

What Apple did — and what I thought Cook clearly stated — was that Apple put the user experience first. That means they didn't just NFFC HW and expect everyone to fall inline or not care because they could check off that box on a spec sheet, but they got with the financial institutions and major retailers to setup an infrastructure to make this a clear advantage to everyone.


Here's a basic rundown…

Apple wants to add NFC, but they need to make it more secure for storage so they build their Secure Element. Once this is complete they get with the financial institutions to say, "Hey, we have a super secure system that will not only speed up transactions for users thereby increasing your fees but also prevent losses from stolen cards." They see this true so they ink a deal with Apple (who probably also has to take responsibly for fraud from their NFC system) to both lower the merchant fees paid by retailers and to give Apple a very small percent of each transaction.

With that done Apple will have no trouble going to retailers to say that if they support NFC (on their dime) they will make more money from faster transactions and lower merchant fees. Of course they are on board.

Everybody wins.
 
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Some of you have trouble grasping this very basic concept...

When there is a credit card fee the MERCHANT pays it.

Those costs are then passed on to the CONSUMER through slightly higher prices. That's the price you pay for convenience.

So yes, the MERCHANT pays it, but we in turn pay it to the merchant, they are not swallowing those costs.
 
Unfortunately there is a simple one

BigBeast said:
Well until they find a way to keep your detached finger alive and coursing with blood, I think you'll be ok. Remember– TouchID doesn't read just your fingerprint. Thankfully, Apple chose to improve the technology from the 60's. TouchID reads the underlying vascular bed as well. And I can tell you from personal experience while shoveling snow, it works. When my fingers are blue because the blood vessels are constricted, I'm not getting onto my phone using TouchID.
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Unfortunately there is a simple one,

Just take your own prints out with acid, and use the victims finger skin on yours, you can even use glue for that :p
 
OtherJesus said:
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.
Click to expand...

I've always assumed merchants tacked that 2.7% markup onto their prices so the consumer covers the cost of convenience.
 
People don't understand the role of the payment company (global payments, chase, moneris and ...) They are the one making a lot of money on each transactions.

Here's some random numbers:

Debit Card:
0.40 per transaction, no %

Credit card:
0.25$ per transaction + 2%

Here's how a transaction work:

Client--**>Debit/Credit Card--***>Pinpad-->Payment Company-->Bank-->Visa/Master/Amex

Here's what Apple is proposing

Client-->Debit/Credit Card-->Pinpad-->Apple Server-->Bank-->Visa/Master/Amex

They are proposing clients to totally bypass the payment processor. So instead of paying 0.25$+2% to the payments processor, they will be paying 0.25$+1.25% to Apple/Visa/Banks. Stores will be saving money, Apple will be receiving a small royalty, VISA/MC/AMEX and banks will be receiving the same amount of money.

Payment processing company are the one getting f88k really hard with this.
 
Trapezoid said:
Many stores in nyc are cash only. Not major dept stores of course but small to medium sized stores and pizza parlors and Chinese food spots!
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Hot dog vendors and stop & robs notwithstanding, almost every place in the US takes CC tender. And these "cash only" places are selling things that still compete with stores around their area that DO take CC tender. The cash only places still sell their goods/food at the same prices as the other stores- you just have less flexibility in how you pay. With the loss of flexibility, at least you have a lower risk of CC fraud since mom and pop shops have much less security.
 
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