Walmart and Best Buy Opt Out of 'Apple Pay' as Apple Leverages Required Point-of-Sale Upgrades

[boombashi]

Well, seeing that I refuse to shop at Walmart because of their predatory business practices and trashy awful shopping experience, that won't be a problem for me.

And as for Worst Buy, I only ever "showroom" there once in awhile and then click purchase on my Amazon app. Corporate greed keeps them uncompetitive.

 

[Trapezoid]

in one year the emv deadline would be iminent! How can I evaluate the situation a year from now to reconcile this 'far quicker' rate? There is no way I could prove you wrong..

I think I see where the confuson is and its partly due to me. There is a difference between availability of the method and usage of the method. I'm not sure where you're from but in the US, nfc is already available in plenty of places. Same with the rest of the world and more so than the US.

Problem is no one is using it. Those were the numbers that were posted yesterday. That nfc payments would grow at a snail's pace. As you know the ability to pay through nfc has been available on phones for at least three yrs, but the numbers show that no one was doing it.

You will see using your phone to pay become a norm soon. That's because of apple.

 

[AllieNeko]

And reasoning for that is because if you read up on MCX, merchants are prohibited from supporting competitor's system. WHEN MCX fails, they already have the terminals in place. Nobody is going to want a second or third app on their phone.

Enabling NFC isn't a competitor, directly, to MCX. It's just an entry method for the major credit cards they already accept.

 

[luvmyMacs]

Right but my point is, they could still steal your credit card or debit card number. Apple Pay doesn't change that. It eliminates the possibility it may be stolen right there but it's still not completely solving the problem people could get ahold of the number and still use it. Presumably that would become less likely the more you're able to use Apple Pay (less exposure).

All the hacks have pretty much been at stores. My bank has not been hacked. They will be stealing useless numbers if they try to hack Target (for example). They won't be able to see the real number...that is only stored in the secure chip on your phone. My Dad was in Mexico and his card number was stolen...was only used to buy a sandwich in the airport. Had to be the guy behind the counter. I think Pay will drastically reduce the chances of theft.

 

[brendu]

This is likely true today. In several years, I believe that Pay could be Apple's top revenue stream.

According to recent reports, Apple will charge card companies and banks transaction fees. During the keynote, they cited the billions of transactions that take place each day. Even if they're only a piece of that pie and only getting a few cents on every transaction, that adds up to ungodly amounts of money in the long-run. Eventually they'll expand the capability to include PayPal-like features (send money to a friend, etc) and likely become a bank of sorts.

There is a lot to play out here, but if they are successful at establishing themselves as the de facto payment method in the U.S. and then abroad, there is no telling what their profits could be a decade from now.

This is all hypothetical but I think Apple is the only company poised to actually make it happen. All the same it is very difficult to predict the success of this and whether it will ever become more popular than credit cards that literally work almost everywhere. I can't think of anywhere I go that doesn't accept credit cards. I hope Apple pay takes off and becomes the future of payments (to slim my wallet) but I'm skeptical as to wherher other businesses will really get on board. Time will tell.

 

[dewski]

i work at best buy, and man, our registers are 15+ years old. It would be a major investment to upgrade the 18+ registers in every store.

it SHOULD be done though.

After a swipe, or registers take about 30 seconds to authorize a transaction

 

[Z400Racer37]

I worked at Best Buy for five years. They are so ass backwards... There POS systems are based on windows 98, they nfc pads but they are disabled. Its pitiful an electronic company can't use modern tech.

Me too. One year though. Totally Agree.

 

[MauriceMoss]

Don't you have to go into Passbook and select which card you're using?

As far as I understand, you choose a default card. If that's the card you want to use, great. Verify with TouchID. If you'd like to choose a different card, don't verify and slide up from the bottom like you do in passbook, choose the card, then verify.

 

[ericinboston]

Actually you are totally INCORRECT and INVALID. The retailers are being asked to adopt NFC terminals for use by NFC enabled Cards, Google Wallet on Android Phones, Whatever it is on Windows Phones and Pay.

Apple is simply saying that they are going to, like Google Wallet, support NFC just via their back channel system.

Who is Apple actually working with? The banks and card issuers because they need their "virtual card #s" and one time tokens to be matched to already existing credit and debit card accounts. THAT is who Apple is working with.

I'll try saying this again: "The merchants/retailers are the ONES WHO ARE BEING ASKED TO ADOPT this Apple product/service. Period. "

If the retailers were NOT being asked, a)why is this topic even on MR? and b)why is there something out there called Apple Pay?


Again, you are getting deep into the weeds (which would be far too hard to write on a forum post). Also, I didn't go into every roadblock to Apple Pay because a)I don't have the time (yet I believe I covered a high % of the reasons) and b)I don't have an NDA signed with Apple to understand exactly, and I mean exactly, how Apple Pay is supposedly going to work and how the each of that puzzle will be affected and/or differ from the current methodologies.

As someone else mentioned and I thought I mentioned...Apple is not the only solution out there...nor is Apple's core mission/products/services to do POS...and Apple historically being very proprietary in nature as well as CLEARLY not playing well with others and NOT playing well in the business sector, those are just more and more reasons for retailers to not adopt Apple Pay.

As someone else mentioned, Apple Pay will surely work with iPhone/iDevices...but what about non-Apple. Don't hold your breath. iPhone may be a leader in smartphones today (even if it is as high as 70% for example) but don't think for one minute that the retailers are going to ditch 30% of their shoppers because Apple Pay doesn't/doesn't fully support them. What happens if/when iPhone becomes 25% or 40% of the smartphone market x years from now?

 

[brendu]

According to an article I read a few days ago, Apple has negotiated a .15%-.25% reduction in the bank's portion of the merchant fee. I think it's reasonable to assume Apple will collect that instead.

That's 15-25 cents for every $100. So, if you use your iPhone in $10,000 of credit card transactions, apple collects $15-$25.

Apple's profit margin is about 20%. If we map that to an iPhone, it's $650 * 20% = $130. In order to match that amount, a user would only have to charge $52K - $87K over the life of the phone.

It's not unreasonable for someone in the upper middle class to charge that amount over a two year period. And it's essentially no effort for APple, once the infrastructure is set up in the banks.

I think it is unreasonable to think the majority of iPhone owners will spend $50-$80k using their iPhones over two years. Most payments will be things like McDonald's and target. Not your mortgage or rent, not your car payment, not your cable bill.

 

[nsayer]

Not quite. "Your phone" should be "your iPhone 6 (or later)". There are none out there now and in the next year I doubt it will amount to more than 5% of all smartphones worldwide. I can't blame retailers for not jumping in on a solution that so few people can use for at least a couple years or more.

I'll bet you $50 here and now that the iPhone 6 and 6+ will be at least 20% of the US smartphone market share on Holloween 2015.

 

[SonicSoundVW]

Apple's solution is akin to them asking retailers to install a new credit card device (granted, much more secure) and then saying it will only accept one credit card. The best way for Apple to make money on this is to open the protocol so all smartphones with NFC can take advantage. THAT will get the attention of retailers. Let's remember, Apple only has a 15 - 20% market share of smartphones. Retailers know that quite well.

15-20% of what market?

"Apple's U.S. iPhone Market Share Holding Steady. comScore comScore's April U.S. smartphone market share data shows Apple Apple the leading vendor at 41.4%. Its share is flat from March, down 0.2% since January and up 2.2% from a year ago." ~Forbes

and another one

"When it comes to OS market share, Android takes the slight lead, with 52.1 percent of the U.S. market, compared to Apple’s 41.9 percent for iOS. Microsoft, BlackBerry, and Symbian account for just 3.4%, 2.3%, and 0.1%, respectively.
Read more at http://www.cultofmac.com/286237/iphone-1-smartphone-u-s-market-share/#1iRZZK5fmpiGy4MF.99"

 

[RedBanana]

There seems to be a lot of info missing about all this. I'm surprised the public or the media aren't asking more questions. e.g.

- Apple take a cut every time they make a purchase, so thats an extra charge to the consumer right?
- Apple are collecting all the data on what they purchase, what is the plan with that? Remember, big retailers will still get the info via loyalty cards too.
- Why would places like Canada install this system? Places where contactless payments systems are already in place (you can tap and pay with your debit/credit card, or NFC Android phone direct from your bank, NFC iPhone6 too I assume too, or via Google Pay).
- Can I use an Apple Pay station by tapping my NFC bank card or NFC Android device? If not why not.

 

[anek007]

Merchants will bend to the will of the consumer who has money to spend or else...and they will also bend to the will of the banks and CC companies who will force them or charge them additional fees for not doing it. Itll be a few years but debit cards werent accepted right off the bat either.

Retailers are already struggling with competition of online prices. Cost of device and continuous service to tack onto their bill the share holders wont be happy. Most places dont even accept my american express card because their high fees and not enough customers use it.

 

[gotluck]

I think I see where the confuson is and its partly due to me. There is a difference between availability of the method and usage of the method. I'm not sure where you're from but in the US, nfc is already available in plenty of places. Same with the rest of the world and more so than the US.

Problem is no one is using it. Those were the numbers that were posted yesterday. That nfc payments would grow at a snail's pace. As you know the ability to pay through nfc has been available on phones for at least three yrs, but the numbers show that no one was doing it.

You will see using your phone to pay become a norm soon. That's because of apple.

aye, agreed. consumers actually paying with their phones will be largely due to apple

 

[AllieNeko]

There seems to be a lot of info missing about all this. I'm surprised the public or the media aren't asking more questions. e.g.

- Apple take a cut every time they make a purchase, so thats an extra charge to the consumer right?
- Apple are collecting all the data on what they purchase, what is the plan with that?
- Why would places like Canada install this system? Places where contactless payments systems are already in place (you can tap and pay with your debit/credit card, or NFC Android phone direct from your bank, NFC iPhone6 too I assume too, or via Google Pay).
- Can I use an Apple Pay station by tapping my NFC bank card or NFC Android device? If not why not.

Because these aren't even questions, they're rather obvious:

1. No, they MIGHT be getting a fee from the banks, that already get a credit card fee (which doesn't change) from the merchants.

2. They've said they're not.

3. Because it's another way to use those terminals.

4. Yes, it's nothing special.

 

[MauriceMoss]

There seems to be a lot of info missing about all this. I'm surprised the public or the media aren't asking more questions. e.g.

- Apple take a cut every time they make a purchase, so thats an extra charge to the consumer right?
- Apple are collecting all the data on what they purchase, what is the plan with that?
- Why would places like Canada install this system? Places where contactless payments systems are already in place (you can tap and pay with your debit/credit card, or NFC Android phone direct from your bank, NFC iPhone6 too I assume too, or via Google Pay).
- Can I use an Apple Pay station by tapping my NFC bank card or NFC Android device? If not why not.

No. No fees to you.
They collect no data.
If Canada uses NFC then you're all set for apple pay.
There is nothing called apple pay station. It's just an NFC terminal that you use your phone at. Like you do now.

 

[jehrler]

I'll try saying this again: "The merchants/retailers are the ONES WHO ARE BEING ASKED TO ADOPT this Apple product/service. Period. "

If the retailers were NOT being asked, a)why is this topic even on MR? and b)why is there something out there called Apple Pay?


Again, you are getting deep into the weeds (which would be far too hard to write on a forum post). Also, I didn't go into every roadblock to Apple Pay because a)I don't have the time (yet I believe I covered a high % of the reasons) and b)I don't have an NDA signed with Apple to understand exactly, and I mean exactly, how Apple Pay is supposedly going to work and how the each of that puzzle will be affected and/or differ from the current methodologies.

As someone else mentioned and I thought I mentioned...Apple is not the only solution out there...nor is Apple's core mission/products/services to do POS...and Apple historically being very proprietary in nature as well as CLEARLY not playing well with others and NOT playing well in the business sector, those are just more and more reasons for retailers to not adopt Apple Pay.

As someone else mentioned, Apple Pay will surely work with iPhone/iDevices...but what about non-Apple. Don't hold your breath. iPhone may be a leader in smartphones today (even if it is as high as 70% for example) but don't think for one minute that the retailers are going to ditch 30% of their shoppers because Apple Pay doesn't/doesn't fully support them. What happens if/when iPhone becomes 25% or 40% of the smartphone market x years from now?

And I'll try saying this again. Merchants are being asked to adopt NFC terminals. Yes those will support Apple but they will also help Google Wallet, NFC enabled cards and be one of the ways to avoid merchant fraud liability on swipes come 10/15.

Because of the looming deadline, the merchants already need to get new terminals so why not get ones with NFC.

It's like when the iMac came out. Apple only supported USB so if you wanted to make an Apple compatible printer it had to be USB. But all the PCs at the time ALSO had USB ports so the same printer could work for them as well. In the end, the parallel port was left behind, much like the swipe readers will be.

 

[anek007]

CVS, rite aid, circle K and more companies off of that list already has NFC today and now. No issues there.

They have NFC but wont be accepting apple pay services. CVS was rumored to be part of apple pay but isnt listed as a retailer because they are under Merchant customer exhchange. Apple pay is a merchant service which is why apple will be making money off this.

 

[techlife]

Here is how it works.

1) You swipe a regular credit card, the card provides your PAN number to the machine and it gets sent out to the payment processor (VISA or Master) along with the merchant ID. Less secure as the PAN number can be captured illegally inflight and used again.

2) You swipe a card with a chip, there is an encrypted token stored and it can only be decrypted by the payment processor. This chip on the card is hard to be duplicated unlike the magnetic strip. Further as an additional feature as soon as the data is transmitted from the merchant's system it is expired and so it cannot be re-used by whoever is capturing it. This is the new requirement for which all merchants will have to buy a new POS terminal devices and show they are compliant. However note that if the merchant's system gets compromised they can still store this encrypted token and re-use it again. So this means there system will still have to be PCI compliant. Some of us know what this means to implement such a system.

3) NFC is just a communication device used to transfer the information from the card to the terminal. It changes nothing on the processing side.

4) Apple pay has taken this security to one level higher. They store the token in their special security element inside the phone and every time we use the NFC to pay a dynamic code is generated for the token stored in security element specific for that transaction. Apple has worked with the payment processors and only they can decode this dynamic code and retrieve the token. So this information is transparent even to the terminal. The terminal still thinks it is processing a PAN or a token but they don't know it is a dynamically generated code that is unique to that particular transaction. Hacking the phone is not an issue as Apple has already introduced their brilliant finger print security in 5S and made people comfortable with that. This was an excellent move.

So to make apple pay work all the merchant will have to do is to get a new device with NFC enabled and nothing else. Since the system just handles the dynamic code, by moving to Apple pay the merchants can potentially take their systems out of PCI compliance in future with huge cost savings. The compliance recommendations have not been updated for this but sure to follow.
Once the Executive nuts at Walmart understands this $$ factor they will start embracing it faster than you can imagine.

 

[UnfetteredMind]

I'll try saying this again: "The merchants/retailers are the ONES WHO ARE BEING ASKED TO ADOPT this Apple product/service. Period. "

If the retailers were NOT being asked, a)why is this topic even on MR? and b)why is there something out there called Apple Pay?


Again, you are getting deep into the weeds (which would be far too hard to write on a forum post). Also, I didn't go into every roadblock to Apple Pay because a)I don't have the time (yet I believe I covered a high % of the reasons) and b)I don't have an NDA signed with Apple to understand exactly, and I mean exactly, how Apple Pay is supposedly going to work and how the each of that puzzle will be affected and/or differ from the current methodologies.

As someone else mentioned and I thought I mentioned...Apple is not the only solution out there...nor is Apple's core mission/products/services to do POS...and Apple historically being very proprietary in nature as well as CLEARLY not playing well with others and NOT playing well in the business sector, those are just more and more reasons for retailers to not adopt Apple Pay.

As someone else mentioned, Apple Pay will surely work with iPhone/iDevices...but what about non-Apple. Don't hold your breath. iPhone may be a leader in smartphones today (even if it is as high as 70% for example) but don't think for one minute that the retailers are going to ditch 30% of their shoppers because Apple Pay doesn't/doesn't fully support them. What happens if/when iPhone becomes 25% or 40% of the smartphone market x years from now?

The merchants and retailers are adopting NFC, not specifically Pay. By adopting NFC (in their PoS terminals), they can then accept Google Wallet, CC with NFC embedded, Pay and anything else that uses NFC.

The retailers that were mentioned are thus obviously committed to installing NFC-capable terminals in all their stores (this was what Tim mentioned during the keynote, that the retailers listed were committed to updating in all locations).

That's it, there's no more to it for the merchants and retailers. The magic happens elsewhere. So we should thank Google and others for working to push the NFC standard prior to this, but as the article and many others have mentioned, the new requirements from the credit card companies to shift liability is what will really drive this home. Hopefully most retailers will upgrade and, when doing so, will select NFC-capable terminals. By announcing Pay now, I hope it will push retailers to go with terminals that include NFC.

Pay will obviously only ever be on/for Apple devices. Retailers won't care if there's a big shift in the market (Android already holds a higher percentage, right?), as they'll be able to accept other NFC-enabled methods as well. No biggie.

 

[hudson1]

15-20% of what market?

"Apple's U.S. iPhone Market Share Holding Steady. comScore comScore's April U.S. smartphone market share data shows Apple Apple the leading vendor at 41.4%. Its share is flat from March, down 0.2% since January and up 2.2% from a year ago." ~Forbes

and another one

"When it comes to OS market share, Android takes the slight lead, with 52.1 percent of the U.S. market, compared to Apple’s 41.9 percent for iOS. Microsoft, BlackBerry, and Symbian account for just 3.4%, 2.3%, and 0.1%, respectively.
Read more at http://www.cultofmac.com/286237/iphone-1-smartphone-u-s-market-share/#1iRZZK5fmpiGy4MF.99"

A bit old data but MacRumors reported Apple's global share of smartphones in Q1 2013 at 17.3%

https://www.macrumors.com/2013/04/2...phones-outsell-feature-phones-for-first-time/

 

[jehrler]

There seems to be a lot of info missing about all this. I'm surprised the public or the media aren't asking more questions. e.g.

- Apple take a cut every time they make a purchase, so thats an extra charge to the consumer right?
- Apple are collecting all the data on what they purchase, what is the plan with that? Remember, big retailers will still get the info via loyalty cards too.
- Why would places like Canada install this system? Places where contactless payments systems are already in place (you can tap and pay with your debit/credit card, or NFC Android phone direct from your bank, NFC iPhone6 too I assume too, or via Google Pay).
- Can I use an Apple Pay station by tapping my NFC bank card or NFC Android device? If not why not.

The info is actually out there.

Does Apple take a cut? Maybe, but if so it comes out of the already existing fees charged by the credit card companies. The fee doesn't change for the merchant, the banks are just giving some to apple as this is supposed to be a more fraud resistant system.

Is there a charge for the customer? No, the fee for using a credit card at the merchant are exactly the same whether swiping or using apple pay (actually, there are reports that the fees to the merchants may be less). So whatever premium a retailer charges a customer now for a credit card transaction shouldn't change.

Apple discards whatever data it gets. I'm not really sure why it would get any. Normal credit card terminals just are asked to authorize a given amount. They don't know what you are buying or any other info other than what is on the card.

Why would places like Canada install them? They wouldn't because Apple Pay will use THE EXACT SAME NFC terminals. All that is needed is agreements with Canadian Banks and card issuers like Apple has done in the US.

Can you use another NFC card at an Apple Pay Station? There is nothing that is an Apple Pay Station, it is just an NFC terminal so, YES, you can use your current NFC options.

 

[UnfetteredMind]

They have NFC but wont be accepting apple pay services. CVS was rumored to be part of apple pay but isnt listed as a retailer because they are under Merchant customer exhchange. Apple pay is a merchant service which is why apple will be making money off this.

Where have you seen that they have NFC, it's enabled, but they won't be accepting Pay?

It's my understanding if their terminals are NFC enabled, then Pay will work (as long as your card issuer is one of those that has signed on of course).

 

[lowepg]

lol...

I suspect this will end just like the music labels that wanted to play hardball with Apple with the concept of $ .99 singles and the itunes store in general...

Couple million folks walking around with iphones and apple watches wanting to use it to BUY STUFF next year? Im pretty sure you will see retailers come a'runnin.