Kroger Begins Accepting Apple Pay After Years of Holding Out

[lartola]

Yep, posted to thread. Accepting credit cards cost money, and a bunch of companies decided they would rather force people into their own mobile payment solutions rather than make existing credit card use even more convenient/prevalent.

That doesn’t make sense. Even if they force people to use their own payment solution such as walmart’s walmart pay, those payment solutions usually have people paying with their credit card -albeit online instead of physically- so they’re still paying credit card fees anyway. And they’re paying more, because online credit card transactions usually incur a higher fee than physical. If they really wanted to save on credit card fees they’d have to go cash only.

 

[lartola]

Apple doesn't charge Wal-mart for it, Apple's cut comes out of the fraud budget for the card-issuing bank.

Walmart just hates credit cards, they see the value as being for consumers and not for them. They don't see any value for the cut they spend on those transactions, and would rather keep pushing customers to their own mobile solution.

They see it as an abusive relationship that they can't get away from.

Walmart Pay still requires a credit card for payment, though online instead of physically. Your argument makes no sense. They’re not at all staying away from credit cards by pushing walmart pay.

 

[lartola]

They probably negotiated a different fee structure for cards in Walmart app. Plus you are not anonymous when using Walmart app. That personal info has value to Walmart.

Using Walmart Pay basically makes it an online purchase. And afaik banks charge a higher fee on online transactions.

 

[lartola]

Amazon Fresh has them all beat. Scan your palm or a QR code from the Amazon app on your phone when you go in. Put the stuff you want in your cart (or carry it) and then scan your palm or the QR code on your phone on the way out. You don’t have go through a checkout to get your stuff scanned to pay.
The QR is not quite as good as Apple Pay, but it is close. The palm beats every single method of payment and no time wasted in checkout with the scanning puts them a long way ahead of every other store.

The problem with those methods is you’re still storing your real card data on the company’s servers. I do have a problem with that by now. Scanning the palm of the hand may seem modern and secure, but having real card data stored on the company’s server defeats the purpose. As someone already said, these companies are not the best in therms of online security because it’s simply not their specialty.

 

[lartola]

"We" can write such stuff all we want but a simple search for topics like "What does Apple get out of Apple Pay?" will reveal very tangible truth$. Whether Apple is getting directly paid or indirectly paid by the processor or bank so that people like you can imply that Apple gets "not a cent" from <retailer> doesn't alter the truth.

If processor or if big bank, SOMEBODY pays Apple that fee. Does that processor or big bank just eat that cost? Do they just cut their own transactional revenue to make a generous donation to Apple? No, if someone else is paying Apple, that added cost gets passed on to us consumers. So we do- in fact- pay Apple MORE for the privilege of using Apple Pay.

Else, ponder this: why would smart, very successful retail operations like a Kroger (and Walmart, etc) want to make it difficult for consumers to pay for what they want to buy by not allowing methods as popular as Apple Pay? Why would they hold out as some have when- as you imply- it costs them "not a cent" more to offer that method of payment and a chunk of an Apple base "refuse to buy anywhere that doesn't accept Apple Pay." Why are select retailers trying 'roll their own' systems instead of just going with some that are already well proven to work just fine if the latter doesn't cost them anything more? The answers to all such questions will shine a light on whether using Apple Pay costs anything more or not.

While it may not add a line item fee to the customer's receipt, it does add to the stores expenses, which then motivates the store to charge more to cover those added costs. Thus, we DO pay more and that's how Apple makes all that added revenue from Apple Pay. Else, why does Apple bother with Apple Pay if there's no revenue in it for them? Why do we sometimes see stories in which Apple has "made a deal" for <some business> to now accept Apple Pay? Why is Apple paying staff to forge such deals if there is "not a cent" of revenue for Apple?

It doesn't take much logic at all (but a simple website search for those with damaged logic processors) to know the answer to all $uch question$.

You missed the point. Merchants don’t pay a fee specifically for accepting apple pay. Banks do, and sure they likely pass it on to their affiliated merchants, but not directly. There is no way for a merchant to save any cost specifically related to apple pay that the bank may indirectly be passing on to them by disabling contactless. Even if they do so, they might still be paying that cost included in the fee they pay for accepting credit cards.

Furthermore, you’re not considering the merchants whose payments services are provided by non-apple pay participating banks. Those merchants can still accept Apple Pay so long as their bank supports contactless payments, and don’t pay a cent for taking Apple Pay since their bank isn’t paying any fees to Apple. One such example is BBVA in Mexico: they don’t let their customers use apple pay with their cards and therefore pay no fees to Apple, but they do support nfc contactless, so merchants using their POS do accept apple pay just fine and at no additional cost.

 

[RhinoThinks]

I feel like the writing was on the wall how they feel about people and their payment services when they started charging for cash back at their stores; trying to normalize that kind of charge for future generations.

Stopped shopping at Kroger when they closed stores down for not making enough of a profit after the local cities forced them to pay people extra during the pandemic's early days. -- I don't need to actively support greedy corp. monopolies since I have other choices --for now. How any their constant mergers and acquisitions are approved is beyond me.

 

[lartola]

AMEX is a great example of the same concept. Discover still has a bit of this problem too.

However, there is more than one post in this thread implying that there is not a cent for Apple in Apple Pay... and we should all naturally know much better than that without having to look it up for any evidence. For anyone in doubt, a simple web search will reveal all.

And I don't think it is idealogical at all. I think it is simple dollars & cents. It costs more than accepting traditional mainstream plastic so some retailers don't want to absorb the added cost.

• Why does it cost more? Because Apple wants a cut.
• How does Apple get that cut? Presumably, the bank adds that "commission" on to the transaction fee.
• Are banks known for their generosity? No. So how do they (re)cover that added cost? Bill the retailer more in transactional fee.
• Do the retailers want to make less on each transaction? No. So how do they cover that added cost?
• Bill us consumers more.

And the buck stops there (or should I say departs there).

You’re basing your argument on a false premise: that every single bank pays a fee to Apple. That’s just not true, and even banks not paying apple any fees because they don’t support apple pay do allow their merchants to accept apple pay by just enabling NFC contactless on the POS. One such example is BBVA in Mexico.

Also your argument fails to explain, then, how is it that apple pay works at stores even in countries where apple hasn’t officially launched it just as long as the store takes contactless payments.

 

[lartola]

As pointed out multiple times, it doesn't cost retailers more. Not sure why you keep repeating this. The percentage that Apple charges the credit card company is offset by a reduction in fraud. There isn't any evidence of an increase in merchant fees. They have remained relatively consistent over the years. The main variable is rewards cards, not Apple Pay. Merchants pay the same fee whether you swipe the card or use Apple Pay.

There are two main reasons that companies don't accept mobile payments. Small businesses that don't upgrade their terminals. And large business that want to track customer purchase across visits.

Not to mention that some merchants work with banks that don’t support apple pay but do support nfc contactless. Those merchants can accept apple pay too and their bank would have no extra cost to pass on to them because they’re not paying anything to Apple. Example: merchants who work with BBVA in Mexico.

 

[lartola]

I think with iOS 17.0 (which may allow third-party NFC access), we may finally see Home Depot, Lowe's and Walmart allows NFC access--using their own apps.

Will it allow it worldwide or just in the EU? because only the EU is requiring Apple to open up the nfc.

 

[lartola]

Try a search for "does apple pay increase interchange card fees?" and read the many posts you find. Your post implies that all of those others are lying.

There are even services popping up trying to help small business minimize the added costs of accepting Apple Pay. For example: https://koronapos.com/blog/apple-pay-fees-for-merchants/ (I have no relationship with them, they are just one of many that popped up in search talking about this topic).

I don't fault Apple for making money any way they can. But clearly SOMEONE is paying Apple and whoever that is is not doing so out of generosity. Ultimately, whoever pays the extra for Apple to get that cut eventually gets to the merchants, who then "cover" the added cost with higher prices... or refuse and thus, don't accept Apple Pay. None of the "middlemen" are going to take the hit to give Apple that commission. If anything, they will want to make more themselves (too).

I'll grant that it is indirect (like carriers offering "free iPhones" doesn't mean that they are actually free either) but I just do NOT believe it is solely out of "fraud" savings. If anything, big bank enjoying any such savings is going to keep it for themselves (that kind of maneuvering is HOW big banks have gotten "too big to fail.") And if the only way to profit (too) on such savings is Apple Pay-like tools, big banks will roll out their own versions of Apple Pay to cut an ongoing fee to Apple out: Goldman Sachs Pay, Morgan Stanley Pay, etc.

And yours implied that every single bank in the world pays a fee to Apple, which is not true either.

 

[lartola]

Anyone interested in truth about this topic, please do searches. There is objective information out there a-plenty about this very topic. I'm not sure why some of us are working hard to imply that the costs of ApplePay are not eventually paid by us users, but whatever. Those interested in (full) truth, seek and ye shall find. There's plenty of stories about this online from seemingly much more objective sources.

Kroger, Walmart, etc are no fools. Their reluctance to accept it are obviously tied to something. Why would they turn away the "I will only buy if I can pay with Applepay" crowd? These entities are not Apple competitors and they readily pay fees to accept payments in forms other than cash & check from other players. They are not too poor to be able to afford updated terminals. So why NOT Apple Pay? The $implest of logic has the answer to that question.

Does experience count? I used apple pay in Mexico for 5 years (with a US card) before any of the local banks ever supported it. Clearly, those merchants had no extra cost for taking my apple pay because their banks weren’t paying fees to Apple.

 

[lartola]

Again, merchants pay the same transaction fee whether or not you use Apple Pay.

While I agree with that, it might be the case that if the merchant’s bank is also an apple pay participant bank they may be charging the merchants slightly higher credit card fees to compensate for apple’s cut. Still, disabling contactless doesn’t save them from paying that slightly increased fee. Of course, merchants working with a non-apple pay participating bank would certainly accept apple pay at no additional cost.

 

[JJSantoro]

Kroger pay is an abomination. They don't have any idea how to make something easy or quick. Launching an app and then going into that app to get a QR code to then scan physically is not something you want to see anyone do - it's like the equivalent of seeing someone be told "that'll be 32.50 ma'am" and then seeing them act surprised that they need to pay, and open up their purse to rummage for the chequebook and a pen and start writing. It's like scary slow.

Contactless payment should be standard, and not just Apple Pay. Kroger just are incredibly cheap and won't modernize. It's pretty bad honestly when my 7-11 will take anything but Kroger will not.

Bear in mind that Kroger claimed they did this before in a similar limited market and claimed that there wasn't a lot of desire for it. Don't be fooled - they are only trying to prevent modernization and that expense.

If you are at kroger you most likely already have the app open to begin with. second yes it is a qr code but it isnt that hard to do. Ive been using it more years.

 

[lartola]

Most of the board likely hasn't been in a grocery store in years, if not decades. Yeah, so out of touch. They look at the exaggerated predictions of the money they would save by not using Apple Pay, and believe it. Heck most of them likely don't even have Apple Pay enabled, and probably use Droid phones because they are cheaper.

I remember someone being so fascinated by the UPC scanner at a grocery checkout. 'Out Of Touch'...

They’re american, most americans (over 50%) use iphones. Besides, android devices being cheaper isn’t 100% true. High-end android devices -which I would expect the exec board to have if they used android- such as Samsung’s Galaxy S line or the google pixel are priced similarly to iphones.

 

[compwiz1202]

Why on earth do you need "cash back?" Why on earth do you need to withdrawl cash from Kroger in such a manner? Just use an ATM. Afraid of ATM fees? Use a bank that reimburses ATM fees.

It's more convenient, but I'm confused. Are they using debit credit. The thing that is inconsistent for me the rare times I want cash back is some places won't ask about cash back if I use AP even if I use the PIN. I have to use the physical card.

 

[echopulse]

Anyone interested in truth about this topic, please do searches. There is objective information out there a-plenty about this very topic. I'm not sure why some of us are working hard to imply that the costs of ApplePay are not eventually paid by us users, but whatever. Those interested in (full) truth, seek and ye shall find. There's plenty of stories about this online from seemingly much more objective sources.

Kroger, Walmart, etc are no fools. Their reluctance to accept it are obviously tied to something. Why would they turn away the "I will only buy if I can pay with Applepay" crowd? These entities are not Apple competitors and they readily pay fees to accept payments in forms other than cash & check from other players. They are not too poor to be able to afford updated terminals. So why NOT Apple Pay? The $implest of logic has the answer to that question.

Most companies are not turning away that crowd. As the number of people wanting to use Apple Pay increases, the number of companies not supporting it decreases. Right now, more than 90% support contactless. When Kroger gets all of it's stores supporting it, that number will go up to about 92%. Lowes, and HEB are also rolling it out this year according to store employees. At that point, only 5 of the top 100 retailers would be rejecting it. Wal-Mart, Hobby Lobby, Home Depot, Winco, and Menards. When Lowes turns it on, I expect HD to follow suit. At that point, about 94% of retail will be taking contactless.

 

[compwiz1202]

I was thinking a 30 min drive or longer. And it could happen, as walmart has more stores than anybody else. I was also thinking of people who live in small towns: sometimes the only supermarket they have in such a town is a Walmart and they have to drive 30 min or more to the next town for a competitor chain.

And it's not even the time per se. Every WM near us is surrounded by tons of other business, and the traffic is ridiculous. Would rather drive twice as long in nice traffic and have minimal crowds.

 

[compwiz1202]

While they're at it can Home Depot add a "Email only" and "No receipt" options?

Their self checkout system is otherwise unironically the best, most reliable I've experienced.

I hate the ones that you use a card but it always wants your email. Can't you get it from my account? CVS is either the best or the worst. You choose digital in the system, and it automatically does it without asking. But if you do paper, you get a receipt longer than you are tall.

 

[tmiw]

Most companies are not turning away that crowd. As the number of people wanting to use Apple Pay increases, the number of companies not supporting it decreases. Right now, more than 90% support contactless. When Kroger gets all of it's stores supporting it, that number will go up to about 92%. Lowes, and HEB are also rolling it out this year according to store employees. At that point, only 5 of the top 100 retailers would be rejecting it. Wal-Mart, Hobby Lobby, Home Depot, Winco, and Menards. When Lowes turns it on, I expect HD to follow suit. At that point, about 94% of retail will be taking contactless.

I can see Walmart, Winco and Hobby Lobby never accepting it, though for different reasons.

 

[nimitz9]

Most companies are not turning away that crowd. As the number of people wanting to use Apple Pay increases, the number of companies not supporting it decreases. Right now, more than 90% support contactless. When Kroger gets all of it's stores supporting it, that number will go up to about 92%. Lowes, and HEB are also rolling it out this year according to store employees. At that point, only 5 of the top 100 retailers would be rejecting it. Wal-Mart, Hobby Lobby, Home Depot, Winco, and Menards. When Lowes turns it on, I expect HD to follow suit. At that point, about 94% of retail will be taking contactless.

H-E-B has been "exploring" accepting apple pay for years now. They have their own pay app like walmart, I guess, I've never looked at it. There is some reason, marketing tracking shopping habits by my card number...,something. I just know they won't give the real reason publicly.

 

[kognos]

If you are at kroger you most likely already have the app open to begin with. second yes it is a qr code but it isnt that hard to do. Ive been using it more years.

I get that, and that might be your experience but the in-store mapping process is sometimes bad. Unless you're one of "those people" who walks around with their phone at their face talking to people, your phone is off. Minimally you have to get your phone, unlock your phone (biometrics, pin, etc), find the app, launch and login to the app (may require more logins), then go to the menu, and choose kroger pay.

Not to mention, the wifi/cell service has to work for all of that.

I won't argue at all that this might be convenient for you. All I'm saying is that this is a HORRIFIC user experience compared to Apple Pay, Google Pay, or any other contactless payment system -- hell my credit card alone has NFC and should work. Nope, not supported at Kroger. Comparatively Kroger Pay is horrific to any other kind of modern system.

 

[silverdiesel]

I went to King Soopers yesterday and I guess I could have used my watch. There was nothing from the store saying it was turned on. I guess since they want to merge with Safeway, and Safeway has Apple Pay, then they need to synch their payment systems. I will say KS has the fasted CC processors I've ever seen. Put in your card and bam, it's approved. However, I love paying with my watch!

 

[lartola]

I hate the ones that you use a card but it always wants your email. Can't you get it from my account? CVS is either the best or the worst. You choose digital in the system, and it automatically does it without asking. But if you do paper, you get a receipt longer than you are tall.

At least CVS did relent on activating contactless and now takes apple pay.

 

[lartola]

I just know they won't give the real reason publicly.

That means they don’t really have a good reason to stay away from contactless. Otherwise, they’d give it publicly and people would understand.

 

[lartola]

I went to King Soopers yesterday and I guess I could have used my watch. There was nothing from the store saying it was turned on. I guess since they want to merge with Safeway, and Safeway has Apple Pay, then they need to synch their payment systems. I will say KS has the fasted CC processors I've ever seen. Put in your card and bam, it's approved. However, I love paying with my watch!

Sometimes they don’t advertise it at all. When Randall’s (owned by Albertson’s group) enabled contactless I saw no indication of it at their stores, other than the four dots simulating the lights of the contactless showing up on the pinpad screen.