Apple Pay Shown to Work Internationally Using U.S.-Based Credit Cards

[Jason83]

So when people say they "support" Apple Pay, they mean the extra security features? Otherwise, I can already use it anywhere that NFC is accepted?

So every NFC terminal works with Apple Pay already, and all these news articles is just about retailers supporting extra security features? I mean I like extra security as much as the next guy, but my CC already protects me anyway...

Not exactly. Take the retailer out of the equation all together. The extra security comes from the connection between apple/iphone and your bank. The retailer is just the NFC reader that connects with your phone (and they only see a tokenized credit card number that is useless should their device be compromised).

Those retailers that "support" Apple Pay are just those which Tim highlighted as being completely ready to accept it. This only means that all their locations support NFC payments (be it Apple Pay, Google Wallet, and whatever Visa and MasterCard's names for their services are that slip my mind at the moment). All the security takes place between your device and your bank, taking anything the retailer has out of the mix when it comes to your data. As long as they are capable of receiving NFC payments, they "support" Apple Pay. And when it comes to using Apple Pay, the NFC-capabile retailers don't get to pick and choose which features/security you get, it's all or nothing. Otherwise cheap retailers would half-a$$ it and Apple Pay would be dead in the water.

 

[alirz]

Does Apple pay require a data connection on the phone for the transaction to work? e.g will it work while in airplane mode or when cellular data is disabled

 

[ajmitchelluk]

I got über to work in the U.K. app asked to set it up and took photo of the card

 

[Tech198]

I was about to say why would Austraians use U.S credit cards if they live there ?

The only reason for U.S from international point of view is when your traveling outside U.S.

But fear not, banks here : Commonwealth, Westpac (my bank) and other will support Apple Pay here soon.

NAB isn't for some reason....

Apple Pay doesn't use the internet, so go and do whatever you want. it requires NFC to function. That's it. No more, no less.

 

[cjmillsnun]

Am I the only one that doesn't get this whole Apple Pay thing?

How is this different than existing NFC solutions that have been around for years?

The difference is in the back end security employed by the banks and the processing companies (Visa/Mastercard etc)

It seems like we see articles for retailers supporting "Apple Pay", but then Apple Pay works with any NFC terminal?! Why do retailers need to support Apple Pay specifically instead of just using stabdard NFC? Is it possible for a retailer to support Apple Pay, but not other NFC solutions (such as Google Wallet)?

Retailers don't need to sign up for Apple pay at all, they just need to sign up for NFC. Their only option is to take NFC or to not take NFC. The partner retailers are one that have NFC enabled at all their outlets, and are doing this for advertising.

I understand Apple Pay introduces some security improvements over standard NFC, but it also seems like Apple Pay works with standard NFC terminals, and standard NFC devices will work where Apple Pay does...

Yup, that's about the size of it.

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Well I was mostly just curious about support for SPECIFICALLY Apple Pay. They're making it sound like I can only use it at certain places, when in reality I can use it everywhere.

I could care less who had it first. It was easy in Japan for me 4 years ago, its easy on Google Wallet for me, and its easy on the iPhone too. I'm just confused why we keep seeing articles for "supporting" Apple Pay, when in reality it's just supporting the extra security...

It isn't even supporting the extra security. That is all done at the bank's end. There is no difference at all in retailer equipment.

 

[Jason83]

What he said. ^

I mean, really, why haven't we known that it'll work with all NFC terminals before? That's really really convenient, and much better than what I originally thought. The extra security is great, but it's not necessary to make a purchase with NFC.

I wonder if Apple will get a percentage of the payments made with regular NFC? If not, they probably don't want this to get out.

The thing is, we HAVE known it will work with all NFC terminals already. There has just been so much misinformation shared on forums by people that shout loud enough that they know what they're talking about. There is no "regular NFC", it will accept Apple Pay transactions because as long as the retailer hardware supports NFC, the negotiation is between your iPhone and your bank. Apple gets their piece of the pie via the bank.

 

[cjmillsnun]

Does Apple pay require a data connection on the phone for the transaction to work? e.g will it work while in airplane mode or when cellular data is disabled

No

 

[Krevnik]

When using NFC you still need an App supporting NFC - so I can imagine what Apple Pay is trying to do is having one app for all and the banks just "hook into" it ... Not sure why retailer need to support it because as you say - they just use NFC terminals so it shouldn't matter what happens on the phone itself. Which app is kicking off the payment etc.

But yea - no idea .. But I won't have to think about it anyway. I am in England and none of the banks I have an account with support payments via phone's NFC chip. Our cards here have an NFC chip built-in but that is about it.

Apple is also trying to attack online payments from the phone with this approach, which is something that has been lacking. There is the "enter a password" system that has been around, but something like this is still more convenient and even harder to forge/hack. It isn't perfect since it only covers purchases made from iOS, but it is a start.

This is relatively new, the idea of tying a credit line to your phone versus a virtual wallet (Softcard being the first I believe), and the U.S. is probably in most dire need of upgrading their payment infrastructure. I wouldn't be surprised to see UK and the EU adopting it down the road, but there's no real rush. Apple's timing also helps create incentive for merchants here to upgrade to NFC instead of merely the mandated chip readers over the next year. So there is another reason to get it out now for the U.S. Rolling it out in Europe mostly provides convenience, rather than extra security, over chip & pin.

 

[dancefreak]

Each CC company charges for transactions (something like 5%) so I am not sure Apple can make profit really. Which retailer would accept additional charges just because Apple wants a slice of the pie ? Obviously no idea how it works in the background but I can imagine it is not that straight forward.

Apple most certainly profits.

It's been widely reported that Apple makes 0.15% of every transaction. This doesnt impact the retailer as the banks are giving Apple a fraction of the fee they already collect because this system theoretically will reduce fraud and save them money in the long run.

 

[Nozuka]

Apple is also trying to attack online payments from the phone with this approach, which is something that has been lacking. There is the "enter a password" system that has been around, but something like this is still more convenient and even harder to forge/hack. It isn't perfect since it only covers purchases made from iOS, but it is a start.

maybe this will become another continuity feature later down the road.

 

[Krevnik]

Well I was mostly just curious about support for SPECIFICALLY Apple Pay. They're making it sound like I can only use it at certain places, when in reality I can use it everywhere.

I could care less who had it first. It was easy in Japan for me 4 years ago, its easy on Google Wallet for me, and its easy on the iPhone too. I'm just confused why we keep seeing articles for "supporting" Apple Pay, when in reality it's just supporting the extra security...

The other issue at play here is that NFC support in the US is lacking.

Note that both Softcard and Apple claim 200k locations where they work. When NFC isn't actually everywhere, you will talk about partners. And in this case, those partnerships are about training, not so much special equipment.

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maybe this will become another continuity feature later down the road.

The harder play here is making it work for web payments. I want something convenient for those times where I have to order from a particular website I may only buy from once or twice.

As long as that infrastructure isn't setup to handle tokenization, it'll have to be something different, and likely less secure.

 

[Kissaragi]

Limiting this to US cards first is a terrible move by Apple. I understand that perhaps they need to make arrangements with banks for debit card support, but credit cards like VISA, MC, AMEX should be able to be used in any country.

I have a VISA issued in Canada, last time I checked VISA is an American company.

But sadly the reality is that Apple probably wants to profit from each transaction, hence the need for deals in each country.

Yes, certainly nothing to do with the enormous amounts of legislation and negotiating that has to be done for each country individually. Theres also no way they would want to make sure everything works in the US first before rolling out further and potentially having bigger problems.

 

[markhort]

Tried all my credit and debit cards I have, including a Capital One credit card, which I thought might work, but sadly they don't.

 

[ipader]

Apple most certainly profits.

It's been widely reported that Apple makes 0.15% of every transaction. This doesnt impact the retailer as the banks are giving Apple a fraction of the fee they already collect because this system theoretically will reduce fraud and save them money in the long run.

So, that is $1500 in profits for every million in credit card transactions.

 

[nebo1ss]

Each CC company charges for transactions (something like 5%) so I am not sure Apple can make profit really. Which retailer would accept additional charges just because Apple wants a slice of the pie ? Obviously no idea how it works in the background but I can imagine it is not that straight forward.

.

5 percent is way off the mark. The typical charge to the merchant for processing a credit card is 1.5 to 3 percent. Apple will definitely be looking for a slice of this perhaps something around .25 percent. It may not seem like much but Visa processed 3.2 Trillion dollars on credit cards in 2010 and Mastercard did 2 Trillion dollars. You can work out what .25 percent of that might be.

 

[heisenberg123]

Limiting this to US cards first is a terrible move by Apple. I understand that perhaps they need to make arrangements with banks for debit card support, but credit cards like VISA, MC, AMEX should be able to be used in any country.

I have a VISA issued in Canada, last time I checked VISA is an American company.

But sadly the reality is that Apple probably wants to profit from each transaction, hence the need for deals in each country.

agreed, I get debit cards are bank deals but I thought Visa is Visa no matter what country you are in

 

[MacrumoursUser]

Yes it is, but sadly, and as usual - Apple couldn't give a **** about their users outside the US. (iTunes Radio still not available in the UK!) This may change if they can cash in but I can't help but feel lately that Apple products are less and less competitive outside their home country - we pay the same (actually a lot more) for less functionality.

Indeed. Never ending promises.

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agreed, I get debit cards are bank deals but I thought Visa is Visa no matter what country you are in

If I can use my plastic visa issued in Denmark to pay for something in USA how is this different. If it is then how and if not what's the ****ing hold up?

 

[bbeagle]

Yes it is, but sadly, and as usual - Apple couldn't give a **** about their users outside the US. (iTunes Radio still not available in the UK!) This may change if they can cash in but I can't help but feel lately that Apple products are less and less competitive outside their home country - we pay the same (actually a lot more) for less functionality.

That's not true at all. Apple DOES want to enter other markets with Apple Pay and iTunes Radio. Of course they want to make money. They just need to negotiate the contracts in different countries, Not everyone negotiating with Apple wants to give Apple good deals right away, so instead of signing contracts not beneficial to Apple, they keep negotiating. I'm sure Apple has dozens of lawyers negotiating these deals every day,

 

[NanaMac]

It is really exciting.... In the long run Apple gonna make big money with Apple Pay....

 

[bbeagle]

agreed, I get debit cards are bank deals but I thought Visa is Visa no matter what country you are in

Not at all. Pretty much any company has its own subsidiaries in different countries to deal with specific laws, regulations and tax implications of those countries. Not all work at the same speeds or have the same priorities.

For example, Coca Cola, it has 11 different business units to sell to different countries, and they only make sugared water, which seems a lot less difficult to sell than tech devices.

 

[MacrumoursUser]

Yes, certainly nothing to do with the enormous amounts of legislation and negotiating that has to be done for each country individually. Theres also no way they would want to make sure everything works in the US first before rolling out further and potentially having bigger problems.

If I go to another country my visa is accepted, if I use my card numbe and all the info to buy online its accepted. How is this different?its just a different way cad info is transferred, but all cards already work everywhere.

I think it's just negotiations for how big apples cut is that's all.

 

[ptb42]

Limiting this to US cards first is a terrible move by Apple. I understand that perhaps they need to make arrangements with banks for debit card support, but credit cards like VISA, MC, AMEX should be able to be used in any country.

Apple Pay implements an EMV tokenization standard. That requires backend changes at the issuing bank to translate the device account number into your real account number.

Apple started with US banks. They will undoubtably expand to other countries.

 

[Krevnik]

agreed, I get debit cards are bank deals but I thought Visa is Visa no matter what country you are in

It is easier to look at it this way: your CC account is controlled by the bank. Visa or MasterCard partner with the bank to handle processing. Out of the ~3% charged to merchants, The payment network (MC/Visa) takes a cut, and the bank takes a cut. In many cases, the bank gives you part of their cut in the form of points or cash back. This is why banks advertise card to their customers, like the Capital One card ads, while the networks advertise to the bank employees.

But MasterCard and Visa are the ones who do the work of handling the payments at merchants on behalf of the bank. Their primary value is how widely they can get accepted at merchants, so the individual banks, who might be small, don't need to do it themselves.

American Express is different in that it is payment network and holder of the accounts. But it also means it has a lot less clout, and it shows by having less coverage than MC/Visa do at merchants.

 

[nia820]

It's new and exciting because MORE people now have access to this than ever before.

Sure, Android had NFC payments before, but it was only available to a small percentage of users on Kit Kat, with the proper phone, and it was more technical to use. It wasn't very hard, it just wasn't super easy.

Apple has made it very easy, and opened this to the masses. This is one of those things that Android geeks don't get. Android just shoves something out there and hopes people figure it out. Apple works with partners, gets out the word, puts out videos, makes it's word actually HEARD, and makes the processes simpler, and more secure, that things actually get adopted.

Umm Google wallet had been around since 2011 which is 3 years prior to kit Kat release. Google wallet and other NFC payments systems have been widely implemented in Europe and Asia.

I think apple pay will open the doors for North American market. But for other countries have been using it for quite some time.

 

[MacrumoursUser]

Apple started with US banks. They will undoubtably expand to other countries.

By the time 6S is released? Why the **** did I buy this phone then ...