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

MacRumors

macrumors bot
Original poster
Apr 12, 2001
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Apple will collect a fee from banks every time consumers use the company's new Apple Pay payments solution, reports Bloomberg. Citing three individuals close to the matter, the report notes that Apple struck individual deals with each bank it has partnered with. Those banks include JPMorgan Chase, Bank of America, Citigroup, and more.

While that gives the tech company a share of the more than $40 billion that banks generate annually from so-called swipe fees, lenders expect to benefit as consumers spend more of their money via mobile phones and other digital devices, the person said.
The sources cited did not specify the exact size of the fee, noting that it could vary or be tied to the value of the purchases made by the consumer. During its announcement today, Apple stated that Apple Pay would be enabled at over 220,000 U.S. merchants including McDonalds, Macy's, Walgreens, Nike, and more. Apple Pay will also be compatible with American Express, Mastercard, and Visa credit and debit cards.

Apple Pay utilizes the Touch ID fingerprint sensor, a new "Secure Element" functionality, and the NFC antenna on the iPhone 6 and iPhone 6 Plus in conjunction with a credit card stored on iTunes to make payments. Apple Pay will also be compatible with the Apple Watch when it launches early next year.

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

sputnikv

macrumors 6502
Oct 3, 2009
498
3,113
That's unprecedentedly huge. I cannot fathom the amount of money this will generate for them.
 
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appleguy123

macrumors 604
Apr 1, 2009
6,596
855
15 minutes in the future
Is Apple Pay compatible with the hardware that some stores and gas stations have to wave cards (or other phones I assume) over the terminal to pay? Or does it require special Apple hardware?

I hope it's the former, because of most of the stores around me already have those machines.
 
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brinary001

Suspended
Sep 4, 2012
991
1,134
Midwest, USA
Apple will be making "bank" (<<<:D) with this whole mobile payments thing. It hasn't even launched yet, and they've already made quite a bit of money from the brand placement. Or at least I would assume that given how many times I saw a Bank of America or AmEx card during the keynote today.
 
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OtherJesus

macrumors 6502
Sep 28, 2005
378
132
Bay Area, California
The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.

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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andy9l

macrumors 68000
Aug 31, 2009
1,699
365
England, UK
In the UK the limiting factor of NFC is a £20 maximum bill/total, for obvious reasons.

Would Apple Pay overcome that, or am I still limited to £20 payments? That is, if it reaches the UK.
 
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pjwal

macrumors newbie
Feb 12, 2014
21
13
Ripe Market for Apple

This was so perfectly ripe for Apple and, imho, the biggest of their product announcements today. The whole payments industry is so completely ripe for exactly what they are doing. There really is no reason for credit card #'s if you think about it. How many times have we all been voicing our credit card #'s over the phone, aloud, etc.

It's impressive that Apple was able to get agreements from the major payment industry players, but what were they really prepared to do? It's analogous to digitization of music, but on a much grander scale.

~paul
 
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HiRez

macrumors 603
Jan 6, 2004
5,967
1,942
Western US
They'll make a good bit, but I'm not sure it'll be that huge, in a relative sense. Given that the entire market for these fees is $40B annually and Apple already makes more profit than that in a year. And they will only be getting a (probably small) percentage of those fees, from a percentage of those customers (what those % are, we don't know yet, but it won;t be all of them).
 
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Tom in London

macrumors newbie
Sep 20, 2011
19
2
LondonUK
Piss poor attempt at a joke.

***********

The banks will pass that fee onto us customers. I wonder how much this fee will be as we'll be paying it.


Not if you don't buy anything :cool:

----------

Yes, and won't it be great when someone hacks into your phone and starts buying all kinds of stuff?
 
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downpour

macrumors 6502
Oct 20, 2009
409
87
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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brdeveloper

macrumors 68030
Apr 21, 2010
2,580
239
Brasil
Wow...

A tax system inside a tax system inside a tax system inside...

-----------
Someday in the future we'll pay more taxes for virtual money management than to the government.
 
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the8thark

macrumors 601
Apr 18, 2011
4,303
1,403
Processing credit cards was never free. Whatever it was, we were almost certainly paying it before.
The fees were just going to a different place.

Yes but now we will be paying the bank fee for using the card and the Apple fee for using Apple Pay.
 
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WBRacing

macrumors 65816
Nov 19, 2012
1,302
2,967
UK
If there's one thing Apple are good at - it's making money.

Just think of how many phones will need repairing / replacing as well as people swing them out to swipe them whilst trying to gather their shopping and drop them. I have fumbled my credit card a couple of times so something as heavy as a (larger) phone with my thumb rests only on the bottom?

Even more revenue.
 
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