Dude- golden krust takes CC. And even IF they didn't, we're talking about a couple dozen stores among millions. Just stop arguing about this. Apple Pay won't be increasing the price of any goods because they've negotiated a small fee with banks, not merchants– i.e. merchants will not see any increase in fees from this (except for the NFC pay system, which would be considered the cost of staying competitive.)
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple to Collect Fee From Banks for Every Purchase Made with Apple Pay
- Thread starter MacRumors
- Start date
- Sort by reaction score
Dude- golden krust takes CC. And even IF they didn't, we're talking about a couple dozen stores among millions. Just stop arguing about this. Apple Pay won't be increasing the price of any goods because they've negotiated a small fee with banks, not merchants– i.e. merchants will not see any increase in fees from this (except for the NFC pay system, which would be considered the cost of staying competitive.)
Or maybe $100 cash, $104 Visa (with a typical US-style magnetic stripe credit card), $102 Apple Pay.
Or maybe $103 cash, $102 Visa, $100 Apple pay. Many business don't need or want to accumulate a lot of cash -- it's expensive and risky to turn it into a bank deposit that can be used to pay the business's own bills.
ANY from of transaction has costs for the merchant. The merchant has to pay those costs somehow. The price of the goods has to take the transaction costs, and many other costs, into account.
If a particular form of transaction is much better for the merchant, he may offer a discount to customers who use it. Such discounts are uncommon for everyday transactions, at least in the US. So the various common types of transactions must be fairly competitive with each other.
Really uncompetitive forms of payment - like a cow, a chicken, or a sack of potatoes - have mostly vanished from the marketplace. There are lots of advantages to the financial services provided by the middlemen. That's why the services are so popular. McDonald's buys lots of beef, chicken and potatoes, but they won't accept any of these in payment for a Happy Meal. Why not, when there's no Visa fee for a sack of potatoes? Are they stupid?
If ApplePay's advantages outweigh the disadvantages, it may become as widespread as CashPay or DebitPay or CreditCardPay. Otherwise it will be about as common as CowPay, ChickenPay, and PotatoPay.
The existence of an ApplePay fee is just one of many considerations that will determine the popularity of the service. It's kind of sad that the concept of "fee for service" gets people so worked up. "Service for free" is, has always been, and probably always will be, the bizarre exception.
So anyone can addPay to their phone, even Android or Windows phones... Don't think so.
That's what I mean by an open standard. Sure NFC tech might be open but Apple didn't just announce that, what they announced will only ever work with closed Apple hardware, it has even got Apple in the name.
The sole purpose of the system is to make more money for Apple, by forcing people to buy their devices if they want to use it, and by charging the banks for the privilege of actually using it.
Really contactless payments should conform to exactly the same standards and protocols no matter what hardware it is running on. Sadly it doesn't look like that will happen now.
Don't be obtuse. It's the same payment for NFC that has existed for years. Anyone can add NFC to their phone and use it. Apple doesn't get paid for that and, at this point, the merchant doesn't get a discount for that but it won't matter in markets where iPhone use is massive.
Now other vendors could ink deals for reduced merchant fees with a little kickback, but it's doubtful they'd get anything as close to what Apple gets and they'd have to prove their setup is secure.
That's why Apple branded it Pay, just as they branded their specific usage of BT iBeacons, even though it's not using a proprietary communications protocol.
Well, it has become the American dream for a very small elite, while the rest of the population continually gets poorer and poorer because everything's rigged (look at how the wealth distribution is becoming more uneven). It's called crony capitalism. Still, I'm a fan of Apple. They mostly deserve their profits, as Apple delivers again and again producing the superior products.
Last edited:
You asked for a list of stores that don't take credit. I gave you examples.
I did not say every Golden Krust doesn't take CC. I said that there are plenty of places in nyc that don't, and it's not just chicken n rice vendors and bodegas.
If you didn't want an answer to your question, why'd you ask it?
The PNC page is a bit confusing. It first says Apple Pay will be accepted at 220,000 locations, then in FAQs it says that PNC is working with Apple to enable their cards for use with Apple Pay. So it sounds like the terminals will accept payments, but if your card provider doesn't participate, then you're SOL. This could actually drive customers to the banks that support Apple Pay.
sure... I wouldn´t mind paying with my iPhone, I guess Apple will be competing against paymentservices like VeriFone
I don't think so. Apple would have to approach every merchant and modify/replace their PoS terminal to forward iPhone transactions to Apple. That won't lead to widespread adoption.
Instead, I believe they have an agreement with the banks (that issue VISA, Mastercard, Amex) to accept a slightly lower transaction fee, and Apple gets the difference. According to this article:
http://bankinnovation.net/2014/09/apple-said-to-negotiate-deep-payments-discounts-from-big-banks/
....it's 15-25 basis points, or 15-25 cents on every $100.
This way, any terminal that supports NFC can use the iPhone. To make this work, the iPhone has to transmit information over NFC in a form that LOOKS like a credit card, perhaps using the account number for the device account number, and another field for the transaction-specific security code.
No, the bottom line is that by offering people an easier and vastly more secure way for paying for things multiple times per day, they can get people to buy their phones and possibly computers. Yes, Apple still wants to make money from their hardware, which they have every right to do, but the amount of money they'll make from Apple Pay likely won't come close to what they made from the now deceased iPod classic this year (news flash it's a very low amount.)
Solution? You put your watch on, have to TouchID once on your phone, keep watch on to make payments throughout the day. When you remove the watch you have to TouchID once more to re-enable payments. As soon as the watch loses your heartbeat you have to TouchID.
Lots of bars and restaurants in DC are cash only. In fact one of them has some of the best HH prices too
. Anyways saying that merchants don't factor the cost of the credit card transaction into their prices is just naive. Just like salaries, rent, and other overhead costs it's going to be factored into the price of the goods and services otherwise the merchant would simply go out of business.
It's also partly why larger retailers can have cheaper prices - they have leverage to negotiate lower rates for their card processing fees.
I have nothing against Apples payment, or any other NFC...it´s a great idea
I was only trying to figure out how they are "pitching" it to the merchants, but I guess we´ll see
This confirms something I speculated about above: the bank has to do something in their systems. The payment processor sees it as a regular credit card transaction, and forwards it to the bank for authorization. The bank has to be able to match the Device Account Number with your credit card account and validate the security code.
This is an easier implementation: Apple doesn't have to deal with the merchants, or change the merchant's systems or terminals. They only have to work with the bank to implement the secure transaction info exchange.
Not an expert, but I believe 6 is more like other. I think that Discover and it's network are 6011. I've had some non-Discover cards that use 6. I could be wrong.
There are no fees to merchants (stores) or customers for using Apple Pay. This is in the Apple Pay developer documentation.
Merchants will continue to pay their normal transaction fees through their provider networks.
There is no fee change.
I apologize if this has been said, but I wonder how this effects banks as far as fraud goes....I assume they're willing to pay this fee in large part due to the security and reduced fraud risk that likely costs them billions each year.
One step closer? If you believe that it makes even the slightest bit of difference, Apple has been there for years.
Seriously, they know who you are, where you are, what you do, what you like...probably better than you do. Knowing what you buy pretty much doesn't even matter at this point.
So like I said....if you think any of that actually matters, or actually has some detrimental effect on your life, then yes Apple already is big brother.
But so far....it doesn't seem like Apple is hurting anyone with this power they wield.....are they?
Particularly given the Home Depot breach. I figured after Target debacle the large box stores would have doubled down on security and keeping an eye on their terminals. Guess I was wrong.
Lots of bars and restaurants in DC are cash only. In fact one of them has some of the best HH prices too
Anyways saying that merchants don't factor the cost of the credit card transaction into their prices is just naive. Just like salaries, rent, and other overhead costs it's going to be factored into the price of the goods and services otherwise the merchant would simply go out of business.
It's also partly why larger retailers can have cheaper prices - they have leverage to negotiate lower rates for their card processing fees.
You seem to be missing the point here. All of these places you give as examples sell food– and not just any type of food– prepared food (and beer apparently). The price of prepared food always bucks trends in what people consider cheap or expensive. Ever paid $200 for a steak? I hope not, but I doubt the increase in price is due to the CC fees associated in the transaction at the end of your meal. The point is, if you go to one of these "cash only" places that sell the same exact products as the guy down the street that does take CC as a form of payment, do you see any savings?? Do you pay less for a coke and a bag of chips from the one vs. the other? Probably not. I mean seriously- the price of the chips is already printed on the bag.
I don't think Apple is going to get a cut of each payment at all. I think what has really occurred is Apple has negotiated lower rates for itself.
So when people buy an Apple product from Apples online store or physical stores they will pay lower fees to banks when processing debit and credit cards. With the billions in revenue Apple pull in every quarter that could add up to a lot of money.
It would also incentivise banks to get on board with the new Apple Pay system because their relationship with merchants would stay the same with regards to who gets paid for processing the payment. In this case the banks would get the money instead of some middlemen services that are becoming more and more popular (Paypal, Square etc).
When Tim Cook stood on stage and said most payment systems fail because the creators of them try to turn it in to a for profit business, that echoed to me that Apple would not actually be taking a cut because that would be a much harder pitch to sell to all the banks around the world and really they are the gatekeepers to a service like this.
Also don't forget what was said on stage, they don't know what you bought, where you bought it or how much you paid. I don't believe all three of these could be true if they were getting paid for each transaction, from what I read today about digital payment systems in general is that a lot of these merchant transaction systems pay the processor on either a flat fee per transaction or a percentage and that it depends how much the customer is paying to determine which is used (flat or percentage).
Apple would need to know the total cost to be able to ascertain how much it's getting and if they should be using a percentage or a flat fee for that transaction.
So when people buy an Apple product from Apples online store or physical stores they will pay lower fees to banks when processing debit and credit cards. With the billions in revenue Apple pull in every quarter that could add up to a lot of money.
It would also incentivise banks to get on board with the new Apple Pay system because their relationship with merchants would stay the same with regards to who gets paid for processing the payment. In this case the banks would get the money instead of some middlemen services that are becoming more and more popular (Paypal, Square etc).
When Tim Cook stood on stage and said most payment systems fail because the creators of them try to turn it in to a for profit business, that echoed to me that Apple would not actually be taking a cut because that would be a much harder pitch to sell to all the banks around the world and really they are the gatekeepers to a service like this.
Also don't forget what was said on stage, they don't know what you bought, where you bought it or how much you paid. I don't believe all three of these could be true if they were getting paid for each transaction, from what I read today about digital payment systems in general is that a lot of these merchant transaction systems pay the processor on either a flat fee per transaction or a percentage and that it depends how much the customer is paying to determine which is used (flat or percentage).
Apple would need to know the total cost to be able to ascertain how much it's getting and if they should be using a percentage or a flat fee for that transaction.
Pay attention
----------
[/COLOR]Yes, and won't it be great when someone hacks into your phone and starts buying all kinds of stuff?[/QUOTE]
Pay attention... which is easier?;
steal your wallet/card (theft complete) or...
steal your phone (they don't have your card or number and can not make a purchase)
...unless they also steal your finger!
This is a very safe system. Great job
----------
[/COLOR]Yes, and won't it be great when someone hacks into your phone and starts buying all kinds of stuff?[/QUOTE]
Pay attention... which is easier?;
steal your wallet/card (theft complete) or...
steal your phone (they don't have your card or number and can not make a purchase)
...unless they also steal your finger!
This is a very safe system. Great job
I am really disappointed Discover (credit card I use most) isn't on that list.