True, but Target has no doubt negotiated a discounted card processing fee with the issuer of their store card, so the Apple fee will probably hurt them more than with regular cards.That's another couple of Internet myths. Merchants don't pay ANYTHING for Apple Pay. Apple charges the banks/credit card companies generally .015% or 15 cents on a hundred dollar transaction, which is more than made up by almost zero fraud.
The token (virtual card number or DAN) is actually not a one-time number but stays constant (you can see the last 4 digits in the Wallet app). Only the additional security code changes for every transaction. This means Apple Pay transactions can actually be tracked and tied to a card across transactions. What's missing is the mapping of the card to a person (Apple Pay does not transmit the name or other identifying information to the merchant terminal like physical cards do). But given that Target closely cooperates with the bank that issues their store cards, I'm sure the bank will be happy to map the DAN to a customer ID for Target. So no, using the Red Card in Apple Pay will not improve customer privacy.Bigger misunderstanding is that roll out is not privacy related. When you use Apple Pay an encrypted, one time use, token is sent from your phone directly to your bank instructing them to pay the merchant the amount on the reader. The merchant never gets any of your information from that transaction. That's why when a merchant's system gets compromised, you information doesn't go with the hack.