Apple Pay Details: Apple Gets 0.15% Cut of Purchases, Higher Rates for Bluetooth Payments

[John.B]

If Home Depot and Target never actually have my CC info, it stands to reason they couldn't lose it to hackers.

Just sayin'...

 

[cmaier]

A Secure Element is a part of standard NFC payments, not an invention of Apple. That's why they're often built into NFC chips, but can be elsewhere.

Practically speaking they have to be in special hardware to provide sufficient security. For example, if done with software running on an otherwise general purpose ALU there are at least two problems. First, do to bugs, attacks, etc. the keys may be read out of memory and the security compromised. Second, standard CPUs are not generally hardened against side channel attacks like differential power analysis. Using an external chip is also a problem because there's still a point of vulnerability in the inter chip communications (unless nothing that needs to be secured is ever communicated, which can be the case in some implementations).

So it's a good thing that they built it into the chip. Yay apple.

 

[borneo76]

This is why Apple always win over Google, Apple really know how to play and make money

 

[osx11]

OK Guys!

This is a perfect example of people's inability to understand basic math!

If Apple gets 0.15% of every purchase, this means that they will get 0.15 cents for every dollar. This implies that they will get 0.15 dollars for every 100 dollars.

People need to remember that 0.15% is the same as 0.0015!

This is the part that is (but shouldn't be) causing confusion!

 

[cmaier]

Thanks!

But my point was... the iPhone 5S doesn't have it.

And a fine point it is.

 

[iPhil]

Even IF its .15% its still lower than Square they take 2.75% per $100


Clear pricing, fast deposits
Pay 2.75% per swipe for Visa, MasterCard, Discover, and American Express. Swipe $100, see $97.25 in your bank account in one to two business days.


More info on Square I know the founder of Square is the same guy as co-founder of Twitter..
No I do not know him personally

Twitter /Square founder info -- Jack Dorsey

 

[John.B]

So you guys in America are only just getting chip and pin cards (or EMV cards as I'm seeing it called a lot) so have therefore been having to sign every time you use your card in store and yet you still get NFC payments with Pay probably long before us? This world confuses me sometimes...

Don't hate the player, hate the game.

 

[Michael Scrip]

What? Yeah, maybe 10 years ago for 6 months.

Apple's iTunes earns about $3 billion a year in music sales.

They take 30% of every song sold on iTunes.

Yes... they make money from iTunes.

But how much more do they make from the hardware? That was my point.

The iPhone alone is 70% of their business.

The topic was Apple Pay as a value add for their customers... much like the iTunes Store and the App Store. Those types of services sweeten the deal to make the Apple ecosystem more attractive.

Can they make money from those services? Of course! But they pale in comparison to their primary hardware business.

 

[Quu]

Eh, they can take a cut of the profits but still provide a better customer experience, tbh. I bet part of the reason they're getting this cut is the sheer # of customers they're bringing to the table, with high penetration of their OS, and guaranteed support on their side, only one company to deal with in terms of manufacturing, etc.

For consumers the benefit is ease of use and the promise of private data in comparison to others.

Of course I agree you can do both, but what I'm thinking is, if Apple is pushing to get a cut it will make companies not want to partner as everyone wants to make money on the transactions. For example Walmart is backing a different system that will give them more favorable terms on purchases etc

What this kind of system really needs is someone who says I don't want any money at all. And that is what I thought Apple was going to do to make sure Apple Pay was ubiquitous. It turns out that isn't the case and there is already push back from big retailers who will not offer support.

 

[John.B]

Hold on! Banks charge retailers 1.5%_2.5% for every purchase customers make.
Now they only shell out .0015% to Apple; that is 1% of what they make.
Customers are shielded from these charges so they ar not aware.

I know. For some guys it's like some huge injustice that Apple would get a tiny percentage for their part in the Pay process.

How much do you think the banks skim off the top of every transaction, every second of every day?

 

[BruiserB]

Even IF its .15% its still lower than Square they take 2.75% per $100


Clear pricing, fast deposits
Pay 2.75% per swipe for Visa, MasterCard, Discover, and American Express. Swipe $100, see $97.25 in your bank account in one to two business days.


More info on Square I know the founder of Square is the same guy as co-founder of Twitter..
No I do not know him personally

Twitter /Square founder info -- Jack Dorsey

The 0.15% doesn't change anything that the merchant pays. The merchant may still give 2.75% to the credit card company (or whatever the rate is). The credit card company will keep 2.60% and give 0.15% to Apple. But this isn't necessarily a loss to the credit card company or bank. Right now the bank has to deal with fraud. They must have confidence that this will reduce fraud by at least 0.15%. So they come out ahead. And Apple comes out ahead. Win/Win

 

[Michael Scrip]

This is a perfect example of people's inability to understand basic math!

If Apple gets 0.15% of every purchase, this means that they will get 0.15 cents for every dollar.This implies that they will get 0.15 dollars for every 100 dollars.

People need to remember that 0.15% is the same as 0.0015!

This is the part that is (but shouldn't be) causing confusion!

Thank you!

There were some people saying ".15 cents for every $100" instead of ".15 dollars for every $100"

 

[Rainbow Evil]

The fact that Apple's payment charge is based on a % cut of the purchase means I'll never use this service. That's just too greedy. It should have been a very small static fee like how VISA charges used to be. No thanks, Apple.

Better a percentage than a static fee - static fees lead to more places having minimum charges because the banks will pass on the static fee or at least impose rules about minimum spending.

 

[osofast240sx]

Of course I agree you can do both, but what I'm thinking is, if Apple is pushing to get a cut it will make companies not want to partner as everyone wants to make money on the transactions. For example Walmart is backing a different system that will give them more favorable terms on purchases etc

What this kind of system really needs is someone who says I don't want any money at all. And that is what I thought Apple was going to do to make sure Apple Pay was ubiquitous. It turns out that isn't the case and there is already push back from big retailers who will not offer support.

just walmart, walmart will give in.!

 

[JoEw]

Of course I agree you can do both, but what I'm thinking is, if Apple is pushing to get a cut it will make companies not want to partner as everyone wants to make money on the transactions. For example Walmart is backing a different system that will give them more favorable terms on purchases etc

What this kind of system really needs is someone who says I don't want any money at all. And that is what I thought Apple was going to do to make sure Apple Pay was ubiquitous. It turns out that isn't the case and there is already push back from big retailers who will not offer support.

Apple's brand name is so popular I am surprised they did not bargain more than what they are getting now.

If you are a merchant you would rather have someone use Apple pay than Square or a standard debit/credit transaction.

 

[BruiserB]

The fact that Apple's payment charge is based on a % cut of the purchase means I'll never use this service. That's just too greedy. It should have been a very small static fee like how VISA charges used to be. No thanks, Apple.

The banks (not the merchants) are paying Apple. It's worth it to them because it will reduce the fraud they now have to deal with. This may very well reduce their costs....not increase them. They are paying Apple for the security improvement.

 

[topmounter]

wow, more middle-men. brilliant.

 

[ptb42]

There are two possible outcomes of that comment...

(1) you are trolling
(2) I just lost my faith in humanity

What's worse is all of the people that up voted his post.

 

[Patriot24]

I have said it and I will continue to say it - Pay is the most important thing announced on Tuesday. There is a massive opportunity to really change the way that we deal with this particular aspect of our lives and make Apple a ridiculous amount of money in the process.

There is a long road ahead to making something like this the standard for payments, but I can't think of a better company to make a real run at it.

 

[ptb42]

Who's paying that .0015% fee?

Are processors going to up the rates on all merchants, or will they give up their piece of the pie?

The bank pays it. The banks reduced their cut of the merchant fee.

The merchant fee paid by retailer is the same as a presented credit card.

 

[groovyd]

what bankcs aren't considering in terms of ApplePay not being a threat and putting them at the center of control is that once this form of payment is the standard and everyone is using it then apple will flip the switch on their own credit accounts and start taking the whole 3%.

 

[John.B]

The fact that Apple's payment charge is based on a % cut of the purchase means I'll never use this service. That's just too greedy. It should have been a very small static fee like how VISA charges used to be. No thanks, Apple.

Look into how much the banks charge merchants (who charge us higher prices to make up for it), then get back to us. I'm thinking your outrage may be a bit misplaced.

 

[HenryDJP]

And that is how Apple wins.



Way more than that. That's .0015% of every transaction done using Apple Pay.

If you pay for a Macbook Pro using Apple Pay, Apple just made $3 off of your credit card company alone.

And you conveniently forget that credit card companies charge the retailer anywhere from 2-4% for using their card services. I would rather Apple get the money and use it towards future technology and save me from carrying around my credit cards. There's no benefit to the consumer when the credit card companies charge the retailer. If anything those fees possibly go towards what we are buying which raises prices.

 

[lbcentaur]

Text associated with link to this article is wrong

When I copy & paste the link to this MacRumors article, the headline reads "Apple Pay Details: Apple Gets .0015% Cut of Purchases, Higher Rates for Bluetooth Payments" in my Facebook post.

In their September 9 dog and pony show Tim Cook made it sound like Apple was doing this purely for altruistic purposes. Hardly! Apple knows that the real money is getting a tiny piece of most future financial transactions.

 

[djuzi]

I find it hilarious how bad people are at math on here lol

$1,000,000,000 in Apple Pay transactions is $1.5 Million to apple.

And you can't compare Square or Paypal to Apple Pay. Apple pay doesn't charge the business anything. The banks are directly paying apple. For example:

I have square at my business. $100 Visa transaction and I pay Square $2.75 (2.75%). Square pays part of that to Visa for the privilege to take Visa.

I have an NFC point of sale at my business, I already have my set rates from the credit card merchant. I pay the same rates to the merchant when an apple pay transaction comes in that I've been paying always for credit card swipes. Instead, now the bank pays Apple .15% out of the fees they'll receive from the merchant bc Apple is providing a vehicle for their CC to be used at the business.

Apple Pay is the first real mobile wallet! Not a credit card merchant. That's what makes it's so different that Google wallet BS.