Resolved Why won't Apple Pay work with all credit cards?

moonman239

macrumors 68000
Original poster
Mar 27, 2009
1,521
22
Apple could have juat decided to offer something similar to what PayPal offers. Why didn't they?
 
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moonman239

macrumors 68000
Original poster
Mar 27, 2009
1,521
22
Paypal's offering is limited in retail stores. Apple has more chance of going mainstream than Paypal ever had.
Yes, but with PayPal, you can use any valid credit card. My question is, why won't Apple lat you do that for Apple Pay?
 

terraphantm

macrumors 68040
Jun 27, 2009
3,678
507
Pennsylvania
I think what it comes down to is that not all banks can handle tokenization yet. Well that, and not all of them want to give Apple its 0.0015% cut.
 

pacmania1982

macrumors 6502a
Nov 19, 2006
989
186
Birmingham, UK
PayPal apparently didn't want to sign an agreement with Apple because they have some deal going already with Samsung

That's if you believe the media
 

moonman239

macrumors 68000
Original poster
Mar 27, 2009
1,521
22
I think what it comes down to is that not all banks can handle tokenization yet. Well that, and not all of them want to give Apple its 0.0015% cut.
1) Apple could charge the credit card as if we were buying from Apple.
2) Apple could pass the .15% charge to either the retailer or the consumer.

Online Retailers still have to add the option of using PayPal and the associated service.

It's not as simple as you think it might be.
In that regard, Apple Pay shouldn't be like PayPal.
 

terraphantm

macrumors 68040
Jun 27, 2009
3,678
507
Pennsylvania
1) Apple could charge the credit card as if we were buying from Apple.
2) Apple could pass the .15% charge to either the retailer or the consumer.
With option 1, Apple essentially picks up a credit card fee for something they aren't selling. For point 2, they could, but they don't. Apple's strategy seems to be to make the process transparent to the merchant and customer. In fact, they even advertise that in their developer faq

How much does it cost to accept Apple Pay?
Apple does not charge users, merchants or developers to use Apple Pay for payments. Your credit and debit transactions will continue to be handled by the payment networks.
https://developer.apple.com/apple-pay/Getting-Started-with-Apple-Pay.pdf
 

Rigby

macrumors 601
Aug 5, 2008
4,741
3,689
San Jose, CA
Personally, I'm really glad that Apple doesn't insert itself as a middle-man between you and your bank like Paypal and Google Wallet do. Not only would that add additional cost, it would also weaken privacy and potentially lead to similar issues like Paypal freezing accounts etc.
 

wombat94

macrumors member
Oct 15, 2010
69
28
Apple could have done what PayPal does but they chose not to.

There are many reasons for this, but perhaps the most significant one is that they do not have to, or want to, have all of the credit card numbers in a database so that they can charge them for the merchant - the way that PayPal does.

Apple is implementing a very new part of the credit card processing system - EMV Tokenization - which is one of the most secure ways to process credit cards at retail point of sale - where most of the recent attacks have been happening.

In order for a card to be used with EMV Tokenization, the bank that issued the card has to support the new standard as well - and has to agree to work with the tokenization provider (in this case, Apple). Not all banks are ready to support EMV Tokenization and not all of those that do support it are willing to work with Apple.

In the long run, virtually every bank will likely get onboard with EMV Tokenization in general (and quite likely with Apple in particular).

EMV Tokenization reduces the chance of fraud because the token is unique for each transaction. Apple's implementation - tied to Touch ID and the Secure Element in the A8 child - is more secure even than that because the generation of the token for a given transaction is tightly tied to the owner of that phone (or next year - that specific watch).

These two things together will virtually eliminate the usefulness of mass credit card data breaches. THAT is why the banks are willing to give apple a small piece of their cut for transactions that get processed through Apple Pay... because even giving Apple that money they stand to SAVE a whole lot of money in reduced fraud.

Apple is the logical "launch partner" for such an initiative because very quickly there will be tens of millions of iPhone 6's out in the wild that can take advantage of the system. But there's no reason to think that other phone manufacturers can't/won't build the same sort of capabilities into their phones/smart watches... even without the TouchID part, EMV Tokenization will still reduce fraud greatly.
 

kilcher

macrumors 65816
Jul 3, 2011
1,262
313
Personally, I'm really glad that Apple doesn't insert itself as a middle-man between you and your bank like Paypal and Google Wallet do. Not only would that add additional cost, it would also weaken privacy and potentially lead to similar issues like Paypal freezing accounts etc.
Yeah, Apple found a way to get a cut without having to get their hands dirty.

If this catches on this could be huge for them (obviously). I'm hoping they'll put more into it than Passbook, knowing what's at stake I think they have plenty of incentive to do so. And if they can get Apple Pay and loyalty/rewards cards to work together automatically that would be even better (assuming that's possible since both are contained within Passbook). And that may lead to Passbook seeing some growth and usefulness.
 

rorschach

macrumors 68020
Jul 27, 2003
2,062
584
It's because of the tokenization. The bank has to support it.

It's annoying to wait if your bank isn't on board yet, but in the long run it will be worth it because of the increased security.
 

Stuke00

macrumors 68000
Oct 11, 2011
1,674
74
Collinsville,IL
I thought it will work with any card as long as its the one tied to your itunes account??? no???

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or .0015
No because the whole point of Apple Pay is your card number is not used in the transaction. It sends your card number to the bank via encrypted communication during setup and your bank replies back with a token unique to your device. That token is then used for purchases and your bank will authorize against that.
 

flatfoot99

Guest
Aug 4, 2010
518
0
No because the whole point of Apple Pay is your card number is not used in the transaction. It sends your card number to the bank via encrypted communication during setup and your bank replies back with a token unique to your device. That token is then used for purchases and your bank will authorize against that.
thanks!
 

macduke

macrumors G4
Jun 27, 2007
10,566
14,057
Central U.S.
Just switch to a bank that supports it. I worked at three different banks when I was younger, and I can assure you there's nothing special about a bank. They all hold your money and everyone in customer service has their hands tied when it comes to actually helping customers. Unless you're absolutely loaded and have a whole pile of products with your bank, don't expect any special treatment for having your account opened there for a long time. Customers come and go all the time and the bank doesn't care because they're making tons of cash. I've never seen such top to bottom greed. Even at the teller level they were cutthroat to get loans so they can register them as "hits" in the system. You take the jobs you can get though while you're in college, and that's what I had experience in.
 

0000757

macrumors 68040
Dec 16, 2011
3,893
842
Is there a list of supported banks? I'm really hoping I can with mine, because mine's a smaller regional bank, and I'm hoping to start using Apple Pay out of the gate.
 

narenh

macrumors newbie
Oct 17, 2014
22
6
San Francisco, CA
Target is an Apple Pay partner, but only for in-app purchases with Touch ID. As of right now, Target does not accept NFC payments in their retail stores. Target is also part of the MCX group which includes Best Buy and Walmart (they're pushing for a QR code based mobile payment system).