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Australian Banks Hold Back on Apple Pay Support Due to Fees
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Sorry... but I can't see an Apple Bank working out too well if they can't even handle basic services they already run.
Not quite. The credit card companies usually (e.g visa, MasterCard) provide the system to connect the customers bank with the merchants bank. They charge a fee for this. However this is not the fee in question. The banks also charge a fee, and this varies by bank and country. This is the fee Apple wants a slice of. Apples business case is to the banks (ie reduction of fraud losses), not to the card companies.
This is why you see those long list of banks coming online with apple pay all the time, instead of just the credit card companies.
My S6 is ready. It will be interesting what my findings will be. Even if Magnetic Secure Transmission (loop pay tech) doesn't work NFC is supposed to kick in without you even knowing about.
That's a fair argument, but I think in practice it's not quite as cut and dried.
It's a bit chicken and egg with Apple Pay. If not enough people use it, then there won't be much saved from fraud in the first place. The other thing is that not all fraud is equal. I rather suspect that the sort of customers that Apple Pay would attract are unlikely to suffer much fraud in the first place, so unless Apple Pay really got as mass market as credit and debit cards, it's unlikely to make much impact on fraud.
I think it must be very hard to work out just how much fraud saved can be directly attributable to Apple Pay. It's an intangible figure because of all the variables.
These, I feel, are some of the reasons why banks are not all taking it up with enthusiasm.
Apple are providing an encrypted security level that doesn't exist on chip & pin cards. In Austraila it's become a huge problem where stolen cards are used to buy anything up to a value of $100 for each transaction, so a thief can have a ball without having to provide a signature or a PIN. This kind of crime has gone up 200% in the past two years, and the banks don't have a clue how to stop it, yet the customer eventually pays through higher bank fees. If Apple were smart they'd argue to the banks that Apple Pay would save them millions in not having to deal with stolen cards, reimbursement to customers and the bad publicity it gets for not doing something about it. That's why Apple charge a transaction fee.
That and the fact the banks don't end up paying for the fraud enacted through their system, the poor dumb customers do. There's no incentive unless Apple could prove their encrypted service would actually save the banks money.
Because Apple does some processing on the back end as well as secure the credit card. It's this resource that qualifies for the fee.
Except the banks end up passing on those charges to the poor customer, so there is no incentive. The write offs can also be used to reduce corporate tax. So the taxpayer loses too.
On the flip side, the cost to roll out the service should be lower since Banks are basically ready and NFC tech has been ubiquitous for years. In providing a safe, secure and most importantly, quick and easy, method to pay for things, they add incentive to customers to put charges against a credit card as opposed to fumbling for change at the till.
There's already rumours that one of Australia's big 4 banks (NAB) is likely to sign up, and I suspect when they fold the other banks will follow suit so they can ride the PR wave, especially around the time that a new iPhone's hitting the market. The banks can claim they have phone NFC options if they want, but their iPhone options consist of custom cases or stickers you put on the back of your phone...hardly ideal.
I suspect this is what will happen but Apple has started high to see what they can get. Apparently they dropped their fees for the UK as well.
I'm pretty optimistic given this is the first news in a long time about Australia getting Apple Pay. It's not like we don't get the same rumours every time Apple is negotiating something be it record, movie or TV rights. It seems pretty likely they'll work things out in the end, even if they can't get all four of the big banks to sign up immediately. There's also a few smaller banks they might have an easier time getting on board.
Apple is insuring purchases made with ApplePay and there is infrastructure involved. It isn't cheap and that's why it isn't free.
I'll happily move back for this feature. That's what the banks need to realise. People will move.
As someone else mentioned, it's chicken-or-egg here. My local bank isn't supporting ApplePay (currently), so I can't use it with that card. If it did support ApplePay, I'd be using it a LOT. Also, many local vendors aren't supporting ApplePay. So if I go shopping and want to use ApplePay, I have to restrict myself to those particular stores that have it.
I really like ApplePay when I've used it (with a different card). So far, I haven't had a lot of opportunity. But if the bank of my choice won't support it and many stores won't either, it's a non-starter. When it's more ubiquitous, people will use it.
What the Australian banks should do is set up a system that uses a QR code on all phones, including flip phones, that customers have to scan with the camera, and then the transaction will come straight from their accounts, as that will be much easier than having an integrated payment system...
That's what CurrentC is....and yeah that's going to fail hard.
Apple pay has the balance of security AND convenience. That makes it the superior form of payment. It's only flaw is universal adoption (terminals supporting NFC and users owning an iPhone or Apple Watch.)
I noticed that when I was in Germany back in 2012. They weren't thrilled when i tried to pay for a SIM card and a month of service with a credit card. Ended up paying for everything in cash my whole time there.
Cash is annoying as hell. I understand that Germans are reluctant to use credit and rack up charges. But why not debit cards? That's pretty much exactly the same as paying cash but it's more convenient and works with Apple Pay.
Yes, and apple has the infrastructure that allows the banks to issue, authorize, and reissue cards without printing or mailing costs.
If it does get stolen/compromised somehow it is a button click to get a new number to the customer. Compared to AMEX printing and overnighting a new card.
I read a similar article a few months ago that only 6% of iPhone 6/6 Plus owners were regularly using Apple Pay. So far it hasn't been the success I'm sure Apple was hoping it would be.
Changing people's payment habits doesn't happen over night. Even for me, a techie, it's been a VERY gradual change. It's also a snowball effect, the more people see the person in front of them in line doing it, the more inclined they would be to try it themselves.
That's the problem with an ambiguous Measure of Effectiveness. Apple doesn't give projected values of the expected usage, they just keep those cards close to the vest.
When Apple does exceed their estimates, as was done in July, the Street measures the numbers that are presented against their own estimates, so Apple is in a lose-lose situation. They cannot present numbers or estimates that are way out of line, so they are slightly conservative on them (which gives them some downward wiggle room), and when the Street takes those lowball numbers into account, it becomes the echo chamber of estimates, and then Apple has to meet those, or the stock takes a 17% dive.
As for me, Mrs. Thequik and I have accounts at two separate banks. My allowance goes to "Bank B" and the rest of the money goes to Bank E. Bank B participates in Apple Pay, and Bank E does not at this time (they said 4Q15 is expected roll out, and when I last tried to add my card, I got all the way past "terms and conditions" - which is farther than I have gotten, which is a good sign...), so there is something.
As for "regularly using Apple Pay", I'd like to know that definition: Is it for the totality of the transactions, or for having 50 iPhone 6 users in a room, and only 3 use Apply Pay. If it's for the former, that can be explained for things like the merchants not taking the card, which should take care of itself in 3-4 months, and the latter can be the reason for the first, or just frustration with usability of Apple Pay (usability being "I can't use it because no one takes it, so I'll just go with "what works...")
We already have many options for tap and go so I think if Apple wants to enter the market, they are going to have to forego what they make per transaction and just think of it as another reason a person would buy an iPhone or watch over the competitors