Apple Pay Officially Launches in Italy

[recoil80]

The contract was leaked a few years back. As this article puts it:

"Issuers are also barred from recovering any Apple Pay costs from cardholders in the program and must absorb their own development costs stemming from their participation."

One cannot imagine Apple signing a similar contract from anyone else. It makes no business sense. That's why it was one of the things that the Australian banks originally requested when asking to be able to negotiate as a group: that they be able to naturally pass on the extra charges to anyone using Apple Pay.

Yesterday I opened a boon account, just to try Apple pay. The first year is free, then they charge 99c every month.
You have to use it with Apple pay since they don't give you a plastic credit card, so boon is obviously recovering the cost from its customers.
Maybe they can do it since they're not a real bank

 

[ArneK]

You need to get an update. Banks and credit unions love Apple Pay. For a tiny amount, 15 cents in a hundred dollar purchase, a bank gets to offer a great science with greatly reduced fraud. This is why thousands of them have signed up, especially credit unions which are signing up in droves. The only banks that have been reluctant are the huge banks that are trying to hold on to monopoly situations.

This is only true for American banks where the hole system is still stuck in the late 90s and finally transitioning into the 00s. My first bank account that I got 2001 was using chip technology on bank cards already - that's the latest advancement in the US (i was just there and they were all quite excited about this chip technology that makes everything so much safer). No wonder banks have a huge interest in Apple Pay - it is actually making it safer. However, for banks in the EU the encouragement is just much much smaller because they hardly safe any money with potential frauds

 

[kdarling]

Yesterday I opened a boon account, just to try Apple pay. The first year is free, then they charge 99c every month.
You have to use it with Apple pay since they don't give you a plastic credit card, so boon is obviously recovering the cost from its customers.
Maybe they can do it since they're not a real bank

Yeah, that's interesting, a prepaid Mastercard issued by Wirecard Bank. So they must be paying the fees. But it looks like they're also their own interchange processor, so they're collecting somewhere along the way. Will have to delve deeper.

You're right about this of course: even if banks are not allowed to specifically charge Apple Pay users more, they almost certainly will find some way to raise rates for everyone to make up for the cost.

 

[truthertech]

You need to get an update. Banks and credit unions love Apple Pay. For a tiny amount, 15 cents in a hundred dollar purchase, a bank gets to offer a great science with greatly reduced fraud. This is why thousands of them have signed up, especially credit unions which are signing up in droves. The only banks that have been reluctant are the huge banks that are trying to hold on to monopoly situations.

For not doing anything? First get your facts straight, then you can distort them.[/QUOTE]


Check out Apple's website, you can see the thousands of banks and credit unions that have jumped on board, and now millions of merchants. It's all coming together to create a great win/win/win. Heck, it's such a great convenience and security and privacy protection, I'll bet most consumers would gladly pay the penny and half on a ten dollar transaction!
[doublepost=1495125282][/doublepost]

This is only true for American banks where the hole system is still stuck in the late 90s and finally transitioning into the 00s. My first bank account that I got 2001 was using chip technology on bank cards already - that's the latest advancement in the US (i was just there and they were all quite excited about this chip technology that makes everything so much safer). No wonder banks have a huge interest in Apple Pay - it is actually making it safer. However, for banks in the EU the encouragement is just much much smaller because they hardly safe any money with potential frauds

You can do a web search and you'll see articles from the banking industry that it's not simply about reducing fraud, indeed that's not the most important reason to adopt Apple Pay. If the banking industry in the US wanted to greatly reduce fraud, they would have adopted a "chip and pin" approach, instead of "chip and signature." That's why most thieves immediately toss out debit cards, but keep the credit cards, even with the chip technology. Sadly, the banking industry has always been content with a fair amount of fraud since they spread that cost across consumers and merchants and their greater fear has been "confusing" consumers by requiring chip and pin at the roll out of the new technology.

The primary reason banks and credit unions in the US and elsewhere have jumped on Apple Pay has been to offer a service to their customers that costs them almost nothing (15 cents on a hundred dollar purchase). There's still an enormous ignorance among iOS users that they have the ability to use Apple Pay. Apple has done zero advertising as they have struggled with the chicken or egg problem. Initially, there were only a few places you could use Apple Pay , and not every phone or tablet had the necessary TouchID, so advertising it wouldn't make any sense, but on the other hand, if they don't create consumer demand, merchants had less incentive to adopt it or advertise that they offered it. We are finally getting close to the required synergy for it to really take off as the number of merchants is in the millions and number of devices may make not only advertising, but incentivizing its use make sense.

 

[ArneK]

For not doing anything? First get your facts straight, then you can distort them.

Check out Apple's website, you can see the thousands of banks and credit unions that have jumped on board, and now millions of merchants. It's all coming together to create a great win/win/win. Heck, it's such a great convenience and security and privacy protection, I'll bet most consumers would gladly pay the penny and half on a ten dollar transaction!
[doublepost=1495125282][/doublepost]

You can do a web search and you'll see articles from the banking industry that it's not simply about reducing fraud, indeed that's not the most important reason to adopt Apple Pay. If the banking industry in the US wanted to greatly reduce fraud, they would have adopted a "chip and pin" approach, instead of "chip and signature." That's why most thieves immediately toss out debit cards, but keep the credit cards, even with the chip technology. Sadly, the banking industry has always been content with a fair amount of fraud since they spread that cost across consumers and merchants and their greater fear has been "confusing" consumers by requiring chip and pin at the roll out of the new technology.

The primary reason banks and credit unions in the US and elsewhere have jumped on Apple Pay has been to offer a service to their customers that costs them almost nothing (15 cents on a hundred dollar purchase). There's still an enormous ignorance among iOS users that they have the ability to use Apple Pay. Apple has done zero advertising as they have struggled with the chicken or egg problem. Initially, there were only a few places you could use Apple Pay , and not every phone or tablet had the necessary TouchID, so advertising it wouldn't make any sense, but on the other hand, if they don't create consumer demand, merchants had less incentive to adopt it or advertise that they offered it. We are finally getting close to the required synergy for it to really take off as the number of merchants is in the millions and number of devices may make not only advertising, but incentivizing its use make sense.[/QUOTE]

Again, this is only true for the US where the payment structure is still stuck in the 90s. There is a reason why CCs basically don't exist in Germany. Because banks have a cheaper and much more secure system. Obviously that puts Apple into a weak spot. It is really only about the convenience for the customer then. And why would banks be willing to pay half of their earnings (within the EU it is capped how much banks can charge per transaction) to Apple just for providing a NFC chip that is in every banking card that you get these days? Apple is indeed in a very weak spot here and I just wish they would open it up for all other kinds of applications. Except for replacing the PIN (which is standard here) with a fingerprint (I give you that - thats a bit safer) there is no real gain for them. But please, if I am missing an advantage of Apple being the middle man please let me know. That the biggest economy in Europe doesn't have it speaks volumes to me.

Apple is in a weak bargaining position with little benefits to offer (especially in comparison to Android). Banks might opt to keep their money and data instead and people who are not deeply integrated into the Apple system might just buy a Samsung next year instead...

 

[MarcoPohlo]

I'm from Czech Republic and we have one of the biggest infrastructure for contactless payments, in terms of number of contactless payment terminals per person. In 2015 there was more than 75 000 contactless payment terminals in the Czech Republic which is the third highest number in Europe. And Czech Republic is a small country with population of only 10 milion people.

You can pay with "beep" almost everywhere, from buses and trains to the smallest possible grocery store. You can also pay with Apple Pay on these terminals, provided you are from a country which supports that (since that is the exact same technology as contactless payments). However it's not officialy supported in our country. And I've heard that Czech banks are not responsible for that, we are waiting for Apple to make the move, everything is ready.

To be honest I don't see where you can pay with Apple Pay in the US, I was in Manhattan, New York City this March and when I tried to pay and put my card to close proximity to the terminal (as I'm used to from back home), nothing really happened. I was being told and I quote here "We don't have this kind of functionality here" so I asked "shall I put it inside?" and the reply was "no, we don't support chip technology" and the staff grabed my card and swiped with that. I felt like in the middle ages. Seriously. And I also hate when people take card out of my hands.

And we use chip technology for far more than a decade now.

So why so slow rollout in Europe when we have far more terminals than the US?

 

[ArneK]

I'm from Czech Republic and we have one of the biggest infrastructure for contactless payments, in terms of number of contactless payment terminals per person. In 2015 there was more than 75 000 contactless payment terminals in the Czech Republic which is the third highest number in Europe. And Czech Republic is a small country with population of only 10 milion people.

You can pay with "beep" almost everywhere, from buses and trains to the smallest possible grocery store. You can also pay with Apple Pay on these terminals, provided you are from a country which supports that (since that is the exact same technology as contactless payments). However it's not officialy supported in our country. And I've heard that Czech banks are not responsible for that, we are waiting for Apple to make the move, everything is ready.

To be honest I don't see where you can pay with Apple Pay in the US, I was in Manhattan, New York City this March and when I tried to pay and put my card to close proximity to the terminal (as I'm used to from back home), nothing really happened. I was being told and I quote here "We don't have this kind of functionality here" so I asked "shall I put it inside?" and the reply was "no, we don't support chip technology" and the staff grabed my card and swiped with that. I felt like in the middle ages. Seriously. And I also hate when people take card out of my hands.

And we use chip technology for far more than a decade now.

So why so slow rollout in Europe when we have far more terminals than the US?

Because why share a cake that you made half-half with someone that only offers you a nicer plate to eat from?

 

[MarcoPohlo]

Because why share a cake that you made half-half with someone that only offers you a nicer plate to eat from?

But that would mean banks are the ones responsible for the situation or card issuer (Visa, MasterCard) and not Apple, because Apple wants more and more banks involved since they have money from that, am I right?

 

[alecgold]

Means that when the time to upgrade and make transition to newer and better systems they were lazy enough to not care. Your explanation of impeding doom is not good enough.

Its not impeding doom, it's just simple plain cost calculation. Rewriting millions of lines of code changing huge databases just to be able to run the latest flavour of software is a risky business when you have good working systems that run practically frozen software with practically frozen data. Early on the cost of keeping the mainframes running and maintaining them where high, but these days with virtualisation it's cheaper to keep the old software, maintain it for relatively low cost and keep on running it.
Your pension fund, the tax agency, banks, social security systems all have ancient systems that need to be kept running and still are and probably will still be running in 35 years when I start to get my pension.
[doublepost=1495216716][/doublepost]

I'm from Czech Republic and we have one of the biggest infrastructure for contactless payments, in terms of number of contactless payment terminals per person. In 2015 there was more than 75 000 contactless payment terminals in the Czech Republic which is the third highest number in Europe. And Czech Republic is a small country with population of only 10 milion people.

You can pay with "beep" almost everywhere, from buses and trains to the smallest possible grocery store. You can also pay with Apple Pay on these terminals, provided you are from a country which supports that (since that is the exact same technology as contactless payments). However it's not officialy supported in our country. And I've heard that Czech banks are not responsible for that, we are waiting for Apple to make the move, everything is ready.

To be honest I don't see where you can pay with Apple Pay in the US, I was in Manhattan, New York City this March and when I tried to pay and put my card to close proximity to the terminal (as I'm used to from back home), nothing really happened. I was being told and I quote here "We don't have this kind of functionality here" so I asked "shall I put it inside?" and the reply was "no, we don't support chip technology" and the staff grabed my card and swiped with that. I felt like in the middle ages. Seriously. And I also hate when people take card out of my hands.

And we use chip technology for far more than a decade now.

So why so slow rollout in Europe when we have far more terminals than the US?

In 2016 we had 630mln contactless payments (doubled compared to 2015), 19mln contactless bank cards, 16mln people, last year we had just 250.000 terminals out of well over 1mln that where enabled, this year it is expected to double and 2018 almost all card payments are expected to be contactless.
Odd thing is that public transport has its own system, but pressure is mounting to make it available to bank-cards as well.
So where is ?!?

 

[kdarling]

But that would mean banks are the ones responsible for the situation or card issuer (Visa, MasterCard) and not Apple, because Apple wants more and more banks involved since they have money from that, am I right?

If Apple wanted contactless Apple Pay everywhere for the benefit of its own customers, it could make it free like Google did back with its original NFC Wallet. Or the same as how we're not charged to take pictures on an iPhone, even though Apple certainly spends a lot more on that soft/hardware than on the fairly off the shelf NFC payment stuff.

But today's Apple is all about profits from services and selling customer access. So they're demanding a fee in return for banks being allowed to let their own customers access the iPhone NFC payment system (which, like all other NFC payment systems, is simply an emulation of a contactless chip card).

Note that Apple's servers are not involved at all in such a transaction. Nor does Apple have to pay for tokenization storage and translation, like the banks do, nor any of the network and other fees.

And Apple's not just asking for a flat fee, like say fifty cents to provision an account number. At least not with credit cards. (With debit cards they want a flat 1/2 cent per transaction, which is almost as much as some interchange networks make.)

With credit cards, their original demand was 0.15% of each transaction. In the US, where banks charge 2%-3%, that relatively small amount wasn't too bad. But in other countries (especially in Europe) where bank fees are capped down to sometimes around 0.20%, then the now relatively huge 0.15% fee (which is 3/4 of the banks' portion!!!) is untenable.

 

[827538]

I'm surprised it's taking so long to roll out. Feels like it's been out for ages in the UK, I use it all the time.

 

[MarcoPohlo]

In 2016 we had 630mln contactless payments (doubled compared to 2015), 19mln contactless bank cards, 16mln people, last year we had just 250.000 terminals out of well over 1mln that where enabled, this year it is expected to double and 2018 almost all card payments are expected to be contactless.
Odd thing is that public transport has its own system, but pressure is mounting to make it available to bank-cards as well.
So where is ?!?

And your country is? I'm sorry but maybe I missed that.
[doublepost=1495226059][/doublepost]

If Apple wanted contactless Apple Pay everywhere for the benefit of its own customers, it could make it free like Google did back with its original NFC Wallet. Or the same as how we're not charged to take pictures on an iPhone, even though Apple certainly spends a lot more on that soft/hardware than on the fairly off the shelf NFC payment stuff.

But today's Apple is all about profits from services and selling customer access. So they're demanding a fee in return for banks being allowed to let their own customers access the iPhone NFC payment system (which, like all other NFC payment systems, is simply an emulation of a contactless chip card).

Note that Apple's servers are not involved at all in such a transaction. Nor does Apple have to pay for tokenization storage and translation, like the banks do, nor any of the network and other fees.

And Apple's not just asking for a flat fee, like say fifty cents to provision an account number. At least not with credit cards. (With debit cards they want a flat 1/2 cent per transaction, which is almost as much as some interchange networks make.)

With credit cards, their original demand was 0.15% of each transaction. In the US, where banks charge 2%-3%, that relatively small amount wasn't too bad. But in other countries (especially in Europe) where bank fees are capped down to sometimes around 0.20%, then the now relatively huge 0.15% fee (which is 3/4 of the banks' portion!!!) is untenable.

Yeah, that is the era of Tim Cook, one would assume man learns from the past (John Sculley overpriced the original Macintosh after the unsuccessful "try for 24 hours and give back" campaign). He's doing the same mistake, everything is so tremendously expensive, even for Apple.

Thank you for clarification.

 

[ArneK]

But that would mean banks are the ones responsible for the situation or card issuer (Visa, MasterCard) and not Apple, because Apple wants more and more banks involved since they have money from that, am I right?

Apple obviously has an interest in making money with every payment you make.

In the US banks and stores are interested in apple pay because it entices ppl to use digital payments over cash (or checks). The increased security translates to lower costs for everyone - thus Apple has a good point to ask for money from the banks.
In a EU country with a lot of NFC cards and terminals the situation is much different.
(1) Little fees to share with Apple to begin with
(2) Banks have much lower fraud rates due to pushing out new technology (as you said: Chip cards are around here since forever)

Thus, it is much harder for Apple to negotiate a deal in countries where a lot of modern technology exists already.