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Banks Pressuring Visa to Cut Back on Apple Pay Fees
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The point, I think, was that while many places did support the contactless payments it did take the pandemic and the drive for everything to be contactless to actually push the retailers to either enable tap payments on their terminals or to finally update the ancient POS terminals they had. At least in the US. I live in a large metropolitan area and even here it took quite a while for ApplePay or credit card tap payments to work at many places. It seems like the last year has pushed the number or retailer I request from about 30% to 80% accepting tap payments.
The holdouts I see at this point are the ones still trying to build their own payment method - think WalMart and Kroger / Fry's. These guys are still trying to get some dedicated app-specific or QR code based process so they disallow any NFC-based contactless payment.
True. Let's remember though, GAAP is only a Generally Accepted Accounting Principle. It doesn't HAVE to be that way.
/s (obviously)
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ApplePay, as I understand it, issues a single-use token and not the actual card number. Therefore Visa does not have the card number to process the recurring payments.
That is true.
Funny enough, a few years back I was buying something and the terminal rejected my scribbled line (I mean signature) with the error "not enough points of contact" on my signature. So I completely colored in the signature box and the transaction processed fine.
It's funny that you mention that. What happens if you aren't GAAP? Using EBIDTA isn't really GAAP, even though it's used extensively and is a generally accepted accounting principle.
True, but is also reported and called out as a non-GAAP financial measure in all statements.
EBIDTA is a recognized metric and one used in almost all management reporting. In that regard, yes, it is a generally accepted accounting principle, but it is not a Generally Accepted Accounting Principle measure.
Net Profit (the closest GAAP measure to EBIDTA) includes excludes interest, tax, depreciation, and amortization expenses. All of which are included in the GAAP Net Profit measure.
*Edited for clarity.
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I'll give you the years behind on contactless bit but outside of a few exceptions card acceptance in general has been common for a while now. If there's any restriction at all it tend to be something like a $5-10 minimum (and only really imposed by smaller businesses, which given how expensive card processing in the US is compared to much of the rest of the West is fair). Plus, whatever surcharges are imposed tend to be in the 50c-$1 range at most for regular stores and ~10c/gallon at gas stations.
That said, there are a few cities in the US that have a well known reputation for being more cash centric than the rest of the country, which could explain what OP reported.
While I agree 30% is a bit steep, Apple pours a lot of resources in their platform, App Store, hosting, API's. There's nothing remarkable about Visa's system, I'm not saying Visa shouldn't receive something but the two aren't really comparable.
seriously. Apple could charge like 15 cents (USD) to handle the API calls and make enough profit on it.
I agree. They have a whole platform, language, API, support, etc… They invest millions and millions.
Google Pay primarily makes money through transaction fees, just like Apple. Perhaps the biggest difference is Google participates in several payment networks, while Apple only participates in the credit card and debit card networks.
It makes sense that issuing banks would be willing to pay fees to Apple - it comes out of their budget for fraud reduction, which is one of the reasons they are charging that percentage on to the merchant. A card with no PIN (as we have in the US) is not nearly as strong as one which does a biometric check. And that physical card has nearly zero fraud protection when used online. Add on top of that the ease and speed of contactless checkout, encouraging people to buy more and enabling a business to hypothetically handle more commerce with the same staff.
This article was specifically about how Visa does billing for recurring payments like subscriptions. The banks were paying for fraud protection ongoing with every new charge, even though they don't get any supplemental benefit.
Google will simply be monetising it in another way. You won’t ever get these services for free, the whole point of them is to make the company money.