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

NFC in the U.S. is barely in its infancy so it's understandable some stores may not want to invest in multiple proprietary systems yet. Best Buy opting out is really of no consequence, but Walmart's adoption would be helpful since it's the largest U.S. retailer.

Time will sort all this out though. Especially, if consumers start spending more $ at stores that accept Apple Pay, all U.S. retailers will start to lean toward Apple Pay. I would think Apple understands this is an evolutionary process and its initial retail partners are in for the long haul. It may be that Apple Pay bombs and Apple has to adopt whatever NFC standard survives. I don't think NFC is going away though so either way it should eventually be transparent for consumers.
 
Patriot24 said:
This is likely true today. In several years, I believe that :apple: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.
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BINGO. Great post BTW
I found this to be the biggest announcement at the event. Open your eyes folks, this is monumental for :apple:. This could bring in revenue streams that surpass iTunes within years.
 
ptb42 said:
Can you only use it for gift cards? What about a credit or debit card?



The manager was a butthead. That's not something you do in front of a customer. The cashier should have already been trained how to accept the code, and told not to touch the phone.

If you use an electronic boarding pass on your phone, you'll notice that the TSA and the airline personnel don't touch your phone: they point you to set it face down on a reader, or hold it under the handheld reader.
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You can have it automatically reload the Wendy's wallet $25 bucks at a time from your credit card. It won't charge your credit card individually for each purchase. When you type in a gift card, it transfers the full amount to your Wendy's wallet and the physical gift card is left with a 0 balance.

As far as the manager being a butt head, I agree and I actually told him I was fine with it. But it did point out a flaw in this system.....cashiers are going to forget/ignore their training and customers are going to hand them their phones and eventually one will get dropped and broken and a customer is going to expect the store to buy him a new phone and the store is going to expect the cashier to pay for it from their minimum wage check. With ApplePay, this won't happen.
 
I see no problem here. Walmart clientele buys cheap, and Apple clientele buys value. These are two exclusive groups of people, so there is no conflict or problem.
 
Chupa Chupa said:
NFC in the U.S. is barely in its infancy so it's understandable some stores may not want to invest in multiple proprietary systems yet. Best Buy opting out is really of no consequence, but Walmart's adoption would be helpful since it's the largest U.S. retailer.
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I was under the impression that :apple: Pay is a service offered to the customer.

It uses existing NFC payment terminals at retailers. If they already have NFC readers, they shouldn't need to do anything. I don't think there is anything proprietary about it. (Merchant hardware wise.)

There is current legislation that requires merchants to upgrade equipment to either Chip and Pin or NFC this coming year. So they're going to have to get one or the other anyway. Right?
 
thisrocks said:
This title is a little confusing. By reading it I initially assumed that vendors had to jump through an extra hoop to support :apple:Pay beyond that of simply having an NFC reader.

If what I'm reading in this thread is true, and there is no extra hoop the title should be a little more clear...something like "Neanderthals Walmart and BestBuy delay NFC POS adoption - No Apple Pay Support in near future"
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THIS.

I have no idea why reporters have to make everything about Apple, especially in this case where it's simply a generic fight to promote their own MCX payment method.

Of course, in times past, the headline would've been: "Walmart and Best Buy refuse to accept Google Wallet".
 
So they opted out but the equipment they're required to get next year would make it work, right? Or can they still opt out? I thought we'd be able to use this anywhere that uses NFC. If it's not accepted everywhere I really see no point.
 
kilcher said:
So they opted out but the equipment they're required to get next year would make it work, right? Or can they still opt out? I thought we'd be able to use this anywhere that uses NFC. If it's not accepted everywhere I really see no point.
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They can get terminals that just support CHIP Credit Cards. And the Walmart near me has them already, but no evidence of them having NFC pads on them.
 
thisrocks said:
As per my 3rd post in this thread...do you have an idea of where you may have got this understanding? I would really like to read a merchant guide to supporting :apple:Pay
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Oh my god... It was in one of the many hundreds of posts about Apple Pay...

Basically, if I pay in the UK say an item for £15.20, here's what happens:

NFC terminal to everyone: Any NFC cards nearby?
My card to NFC terminal: I'm here.
NFC terminal to my card: Would you like to pay £15.20 to terminal Costco 137463?
My card to NFC terminal: Yes, here's a code (a code with the information "Gnasher's card", "Costco 137463", and £15.20).
NFC terminal to my card: Let me check that.
NFC terminal to Visa: Here's a code I got; is that Ok?
Visa to itself: "Looks like Gnasher's card".
Visa to NFC terminal: "Got a payment from a valid card to Costco 137463 for £15.20".
NFC terminal to my card: "Consider it paid"
NFC terminal to Visa: "Please send the money to Costco".

Note that the NFC terminal never checked itself whether the card was valid, but Visa checked that. Now with Apple Pay the steps are very similar:

NFC terminal to everyone: Any NFC cards nearby?
My iPhone to NFC terminal: I'm here.
NFC terminal to my iPhone: Would you like to pay £15.20 to terminal Costco 137463?
My iPhone to NFC terminal: Yes, here's a code (a code with the information "fake Apple Pay credit card", "Costco 137463", and £15.20).
NFC terminal to my card: Let me check that.
NFC terminal to Visa: Here's a code I got; is that Ok?
Visa to itself: "Looks like a fake Apple Pay credit card. I see, it matches Gnasher's account, so that's fine".
Visa to NFC terminal: "Got a payment from a valid card to Costco 137463 for £15.20".
NFC terminal to my iPhone: "Consider it paid"
NFC terminal to Visa: "Please send the money to Costco".

If you look at all the lines with "NFC terminal", there is no change at all. The NFC terminal doesn't know it was an iPhone, and never needs to know. Just works. However, it _must_ be an NFC terminal that already accepts cards.

In the UK, there is currently a limit of £20 for NFC purchases. Obviously if you steal my card, you can make NFC purchases, so they need to keep the limit low. I don't know if that limit is built into the card or the terminal. It makes more sense if it is built into the card (because my bank knows what risk they are willing to take, the terminal can't know that), so higher purchases should work without problems if Apple Pay allows it.

BTW. The code that is sent would be encrypted in a way so that only Visa can read it. And if Visa gets one of these "fake" credit card numbers, it takes note of it and makes sure that the exact same code can never be used again. So if someone listens to the messages going on between the terminal and my card, they can get the code that I used, but it won't work a second time. _And_ the code is designed so that only my iPhone can create a code that matches my credit card.
 
Who purchases anything at Best Buy brick and mortar stores? The only BnM stores I hope accept ApplePay are:

1. Costco
2. Home Depot
3. Local grocery chain
3. Local beer store
4. Local cigar shop
5. Local pubs
 
I thought the point of Apple Pay was that it worked anywhere that accepted contactless credit and debit cards? I thought it used the NFC chip in the iPhone 6 and Apple Watch to interact with the card readers that are enabled for contactless card payments.

Edit: It appears this is the truth. Anywhere which accepts NFC card payments is all set for :apple:Pay because the iPhone or :apple:Watch just poses as an NFC enabled card. This post seems to be suggested this the likes of Walmart don't want to upgrade their POS systems to allow any sort of NFC transaction...which will be bad news for them as NFC payments become more widespread which they definitely will with the work Apple is doing. I imagine in roughly 5 years, everyone is gonna want to pay with their phone because they know they can. I'll be interested to see if any fellow iPhone 6 users are gonna try to use :apple:Pay frequently (Of course, us Brits have to wait for Apple to open up :apple:Pay to UK customers. I don't see why there's even a delay when contactless payment is already a thing here. Apple delays can sometimes mean bad things...we still don't have iTunes Radio in the UK!!)
 
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thisrocks said:
As per my 3rd post in this thread...do you have an idea of where you may have got this understanding? I would really like to read a merchant guide to supporting :apple:Pay
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The Apple Pay website says to look for the NFC payment logo. It's listed under what stores accept Apple Pay.
 
macduke said:
When will these guys learn? It's never best to bet on a technology that is against what Apple is doing. Especially when it relates to customers that place a high amount of value on privacy and security, and in general usually spend more than other handset owners (according to several pieces of research). Now I don't expect to have to stop carrying my wallet any time soon. A big change like this takes time to spread across all the potential partners. But if by this time next year the majority of retail outlets are taking Apple Pay and there are a few holdouts—they better watch out. Their bottom line might start to take a hit. Even a few percent is huge for retailers.
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+1 Couldn't have said it better myself!
 
brendu said:
Hundreds of thousands of iPhones will earn Apple more money than the small percent of sales from Apple pay.
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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.
 
kdarling said:
THIS.

I have no idea why reporters have to make everything about Apple, especially in this case where it's simply a generic fight to promote their own MCX payment method.

Of course, in times past, the headline would've been: "Walmart and Best Buy refuse to accept Google Wallet".
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Thanks this answers my question in this thread also. From my understanding there wasn't anything apple specific about apple pay, it's just nfc.

Now as far as making everything about apple, that's expected because apple will be the one who makes nfc payments popular or more popular throughout the world.

Like I said it's only been two days, and people are already talking about nfc more than I've seen in the three years I've had an nfc enabled phone.

That's apple's doing, not some natural progression of the tech that happens to coincide with the announcement of apple pay :D
 
Did Tim mention in the Keynote that :apple:Pay would still work even if the retailer in question didn't expressly adopt :apple:Pay, but just some form of NFC?
 
macs4nw said:
These retailers probably hope to 'wing it' by supporting their own (MCX) technology, and not having to pay Apple that small cut [...]
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The merchants won't be paying Apple anything. Apple's "cut" is coming out of the bank's portion of the merchant fee.
 
ohio.emt said:
The Apple Pay website says to look for the NFC payment logo. It's listed under what stores accept Apple Pay.
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Perfect!

So what this article is really about is that Walmart and Best Buy have no intention of accepting NFC payments.

Fine....so when I've slimmed down my wallet to just carry my driver's license (or buy a phone case I can slip it into) and decide to go shopping, I will only shop at stores where I can ApplePay.
 
gnasher729 said:
In the UK, there is currently a limit of £20 for NFC purchases. Obviously if you steal my card, you can make NFC purchases, so they need to keep the limit low. I don't know if that limit is built into the card or the terminal. It makes more sense if it is built into the card (because my bank knows what risk they are willing to take, the terminal can't know that), so higher purchases should work without problems if Apple Pay allows it.
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To make the unstated obvious, I suspect the limit is because NFC by itself doesn't have any authorization system (the part where the NFC terminal gets some assurance that the owner of the card is actually the one presenting it). Touch ID solves that problem, and I suspect the "back end" systems can tell the difference between non-strongly-authorized NFC and Pay (or equivalent) operations.
 
ptb42 said:
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.
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Apple will collect the fee from the credit card companies (banks) not from the retailers.
 
It would be a huge expense for them to upgrade their POS.
Maybe they just did an upgrade, so it wouldn't be in their budget to do it.
Eventually they may do it, when the time to upgrade comes again
 
Amazing Iceman said:
It would be a huge expense for them to upgrade their POS.
Maybe they just did an upgrade, so it wouldn't be in their budget to do it.
Eventually they may do it, when the time to upgrade comes again
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Yeah I cant see them not doing it. NFC is about to become huge. They'd bee stupid to hold out for much longer.
 
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