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I'm seeing a lot of the same comments about how banks should be happy to use Apple Pay as they will deal with less fraud. Problem is, banks don't care. They aren't taking the loss and thus have no incentive to prefer a card with more security. The bank simply takes the funds back from the merchant. It's pretty much always the merchant who ultimately takes the loss, not the banks.
 
Same could be said about Apple too...

If concessions were made to Apple when Apple Pay was released, it's high time those concessions were now dropped.

Apple Pay is now established, probably time those concessions were dropped. Apple Pay will and can live on it's own two feet.
The concession are in relation to patented technology that secures the data and allows them to stay in the game. If apple created their own financial network which it sounds like that was the original plan, most of these players would not be benefiting from the increased use of Apple Pay especially during the pandemic.
 
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No.. Visa wants to issue the token for recurring payments themselves. Apple Pay is only really needed for the initial transaction. Reoccurring billing doesn't require Apple Pay at all to remain secure. Once the payment is setup, billing doesn't need to pass through Apple Pay. It can be direct between merchant and the issuing bank.
There will still be a service fee on each transaction, they're just cutting Apple out as the middleman since they really don't need them beyond the initial transaction.
In the payment industry that residual income is the standard reward for facilitating business.
 
All these fees get passed on to consumers anyways. I believe Apple and all issuers need to reduce their fees but let’s not pretend the banks or businesses are paying these fees themselves.
There is a difference. If the fees are collected for something the company (Apple or bank) does it's ok. In this case, one may hope that market competition will keep this fee in check. When Apple collects the fee for something they do not do, it's a racket. The same thing happens with the 30% fee in the App Store.
 
If those concessions are dropped then Apple should also then be free to start their own card network.

Don’t want to play ball VISA? Fine, Apple can take their ball and start their own game without you.
I wouldn’t mind for this to happen, here in Canada it’s mostly VISA and MasterCard having that duopoly with no one in sight attacking them for antitrust or similar endeavors.

If Apple were to rollout their own payment networks I would definitely chip in on that.
 
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There is a difference. If the fees are collected for something the company (Apple or bank) does it's ok. In this case, one may hope that market competition will keep this fee in check. When Apple collects the fee for something they do not do, it's a racket. The same thing happens with the 30% fee in the App Store.
Market competition keeping fees(anything) in check is a myth. It’s the excuse used to insert these fees in the first place. I’m not at all against credit cards or Apple Pay and use them for every single purchase, but once someone starts saying market competition will adjust anything it’s well past that belief being even somewhat realistic.
 
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Secure randomized numbers = less fraud
RFID payments = less wear on cards that require manufacturing and shipping.

Apple, Google and Samsung payments also pushed merchants to upgrade POS systems that are more secure, and in many cases earn Visa and other card companies more income too.

Sorry but I don’t feel sorry for CC companies here.
 
In the payment industry that residual income is the standard reward for facilitating business.
I've worked in the credit business for 20+ years and fully understand how it all "works".
Reoccurring payments (subscriptions/automatic payments), once setup, no longer require the intermediary.

Several processors, not just Apple, insist on being the middle man in the transaction even after an auto payment arrangement has been setup. They are really not required and do not provide any additional fraud protection.
Once it's been established that the card presented is legitimate and the transaction is genuine, a transaction token can be established directly between the creditor and the merchant.
These pass through transaction fees cost millions per year. That cost is passed on to the consumer.
These fees pay my salary. ;)

If Apple wants to establish their own card network, they will find out just how costly it is to operate one. Pretty sure they already know that, which is why they don't back their own credit card. They rely on an institutional bank to back up the card and take on all the risk.
Apple is not stupid for wanting the fee, but issuers and banks are not going to renew Apples gravy train for much longer.
 
I'm seeing a lot of the same comments about how banks should be happy to use Apple Pay as they will deal with less fraud. Problem is, banks don't care. They aren't taking the loss and thus have no incentive to prefer a card with more security. The bank simply takes the funds back from the merchant. It's pretty much always the merchant who ultimately takes the loss, not the banks.

If merchants had always taken the hit, we wouldn't have bothered doing chip cards in the US in the first place. After all, issuing them has costs, too.

More accurately, it's "how much security can we actually justify"? And it seems that chip and signature supplemented by mobile payments is enough according to them.
 
Market competition keeping fees(anything) in check is a myth. It’s the excuse used to insert these fees in the first place. I’m not at all against credit cards or Apple Pay and use them for every single purchase, but once someone starts saying market competition will adjust anything it’s well past that belief being even somewhat realistic.
The market rarely makes an impact on fee adjustments in favor of the consumer.
It's typically Congress and federal agencies that end up putting the brakes on.
 
If merchants had always taken the hit, we wouldn't have bothered doing chip cards in the US in the first place. After all, issuing them has costs, too.

More accurately, it's "how much security can we actually justify"? And it seems that chip and signature supplemented by mobile payments is enough according to them.
If it were only that simple.
Fraud prevention measures go well beyond the physical card or mobile wallet.

Fraud prevention is geared around the card holder. An issuer today will know the card holder's shopping habits, income and payment history, demographic data, the list goes on. It's all used to analyze a purchase and flag one for human review if a purchase strays too far from the model's risk parameters.
The level of AI and machine learning used today is substantial in spotting fraud. It's not perfect, but go buy something out of the ordinary that costs over $500. It will get flagged. What action is taken will depend on your profile with the card holder.
FYI, most issuers no longer require signatures... they have long proven to be pointless.
Some card processors still demand it even though the issuer does not.
 
Apple Pay is now established, probably time those concessions were dropped. Apple Pay will and can live on it's own two feet.
Apple Pay's sole financial model is a portion of the transaction fees. It will not "live on it's own two feet" if it loses its only source of revenue.
 
If it were only that simple.
Fraud prevention measures go well beyond the physical card or mobile wallet.

Fraud prevention is geared around the card holder. An issuer today will know the card holder's shopping habits, income and payment history, demographic data, the list goes on. It's all used to analyze a purchase and flag one for human review if a purchase strays too far from the model's risk parameters.
The level of AI and machine learning used today is substantial in spotting fraud. It's not perfect, but go buy something out of the ordinary that costs over $500. It will get flagged. What action is taken will depend on your profile with the card holder.
FYI, most issuers no longer require signatures... they have long proven to be pointless.
Some card processors still demand it even though the issuer does not.

Of course that's part of it. The networks could have just left it at that for card present transactions, though, and passed all the liability onto merchants (much like what happens now for online retailers)--but didn't.

That said, there's enough distrust towards them floating around that I'm not surprised ZIP codes are still required at most chip enabled pumps or that a lot more places still need signature than expected. Not to mention ID checks sticking around a fair bit after chip became a thing before finally (mostly) going away.
 
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And how exactly do you think they pay those taxes to achieve profits, yep the consumer.
Go read a book on GAAP then come back if you still want to argue. Hint: you don't achieve profits through paying taxes.

 
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Also, I just spent 9 months working in Europe. Before I would need to pay everything in cash, losing $10 for the withdrawal otherwise I would have to pay with credit card which brought a $5+ fee for every transaction.
To be fair, that's just because the US (assuming that's where you're from) is years behind on contactless technology. In Europe we've been paying that way with our credit and debit cards since years before Apple Pay was a thing.
 
I don’t get what the Apple Card has to do with it or why it would upset bank executives… it’s just another Mastercard with a shiny app lol.

I‘d think the contracts for apple pay wouldn’t ignore an issue like this, and it wouldn‘t be beneficial for them to break their contracts since then Apple could just make their own credit card network or buy Amex or discover lol. The thing is, visa and mc have already lost all the power because through their support Apple Pay enabled terminals are everywhere and its supported more and more places online.

i just can’t see it being something they can just stop paying since if it wasn’t part of their terms, then their accounting department probably all about to be fired.

To me apple pay seems more like a paypal competitor than a visa/mc one at this point tho. I don’t quite get their arguments. The credit card networks operating costs relative to their income is just insane and it’s a relatively tiny portion of what the standard fees they charge are. This just seems like more people trying to get gateway access to apples customers for free and then cut out apple lol.
 
LOL
Banks are whining about a .15% service fee that Apple receives for payments on purchases made on an secured platform that Apple invented, which Apple distributes on their devices, making it more convenient for consumers to make purchases, that also happens to create new and more varied revenue streams for banks.

And yet they have no problem collecting up to 5% merchant fees for themselves on those same transactions, nor do they have any issue charging customers interest rates anywhere from 15% - 30% along with a never ending list of other fees and charges on top of that!
 
I don’t get what the Apple Card has to do with it or why it would upset bank executives… it’s just another Mastercard with a shiny app lol.

I‘d think the contracts for apple pay wouldn’t ignore an issue like this, and it wouldn‘t be beneficial for them to break their contracts since then Apple could just make their own credit card network or buy Amex or discover lol. The thing is, visa and mc have already lost all the power because through their support Apple Pay enabled terminals are everywhere and its supported more and more places online.

i just can’t see it being something they can just stop paying since if it wasn’t part of their terms, then their accounting department probably all about to be fired.

To me apple pay seems more like a paypal competitor than a visa/mc one at this point tho. I don’t quite get their arguments. The credit card networks operating costs relative to their income is just insane and it’s a relatively tiny portion of what the standard fees they charge are. This just seems like more people trying to get gateway access to apples customers for free and then cut out apple lol.
It upsets Bank executives because they are greedy and don’t want ANYONE getting a of their rivers of cash generated by fees, even if it is .15%.

Remember these are the SAME executives that charge merchants 5% for every transaction along with the interest and fees they charge to squeeze every drop they can out of consumers.
 
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