Apple Offers iPhone NFC Chip Access to Apple Pay Rivals in EU
Apple Offers iPhone NFC Chip Access to Apple Pay Rivals in EU
Apple has offered to open up the iPhone near-field communication (NFC) system that Apple Pay uses to other payment services, in a possible effort to...
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This reeks of bringing people to the well after it's already dried up. The established convenience of Apple Pay is unlikely to take much of a hit from would-be competitors.
I do hope, though, that it spurs Apple to innovate a bit more, particularly w.r.t loyalty and rewards schemes and the likes.
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I agree, but at least it is now possible to compete with Apple Pay. The position of Apple and Google Pay is too strong if competition is unthinkable.
Apple was smart to partner with the banks and acting as a proxy initially. The next step could bypass Visa, MasterCard, banks, payment processors, ...
The established convenience of Apple Pay is unlikely to take much of a hit from would-be competitors.
Disagree. Apple Pay charges much higher rates than competing payment processors. It benefits everyone except Apple to make the change. It is equally convenient to use a different app w/ NFC.
Apple Pay charges much higher rates than competing payment processors.
Apple Pay isn't a payment processor. It's a system for banks to provisional additional cards on their customer's devices, which are then processed the same way and for the same fees as tapping the physical card.
Banks want direct access to the NFC because they want to bully people into making their app the default handler for payment cards. One of the great things about Apple Pay is that all banks must compete as equals for every transaction. It's trivially easy to switch which card you use when you pay and every card gets the same best user experience.
Forcing NFC open is, paradoxically, anti-competitive, because it makes it easier for the biggest banks to stop competing and instead lock their customers in.
Apple Pay isn't a payment processor.
LOL what? That's literally the only thing it is...
which are then processed the same way and for the same fees as tapping the physical card.
Not correct. Apple doesn't provide this service out of the kindness of their hearts. They charge 0.15% transaction fee.
LOL what? That’s literally the only thing it is…
Merchants do not have any relationship with Apple for Apple Pay transactions. You tap your phone and it's treated the exact same way as when you tap your card. The merchant sends it to whoever they use for card processing, who eventually sends it to the card network (Visa, etc.) and to the bank for approval. That's what payment processing is. Apple isn't involved at any step. They are involved in the provisioning process where cards are added to your device.
Not correct. Apple doesn’t provide this service out of the kindness of their hearts. They charge 0.15% transaction fee.
Apple charges a fee to the issuing bank, which comes out of their share of the card processing fee paid by merchants. The original (2014) reported fee for US credit card transactions was 0.15%. Card processing fees are, in general, significantly cheaper in Europe (and indeed most other countries). We don't even know if the US fee is still 0.15% but it definitely isn't in the EU.
Merchants do not have any relationship with Apple for Apple Pay transactions.
Yes, they absolutely do.
You tap your phone and it's treated the exact same way as when you tap your card.
Not even close. You need to do more research.
Have you literally done zero research into this? The vast majority of merchants in the US, and nearly 100% in many other countries, accept Apple Pay. Doesn't that strike you as awfully high if they actually had to sign up for it with Apple? And add an entirely new payment processor to their operations?
Apple is not involved in any capacity with processing Apple Pay transactions when you tap your device in a business. A Visa card loaded on an iPhone is literally just a contactless Visa. Apple Pay = Google Pay = physical contactless card. One single industry-standard protocol.
For web/app transactions, a merchant has to set up Apple Pay explicitly (though it's still actually processed by the same parties as entering the card number) but for in person, they just need contactless payments enabled on their card terminal. No extra steps, parties, or fees.
Have you literally done zero research into this?
I've clearly done far more research than you have
The vast majority of merchants in the US
No they don't. The vast majority don't even accept Apple, Google, or Samsung Pay, credit cards only.
Doesn't that strike you as awfully high if they actually had to sign up for it with Apple?
No one said they had to sign up for it with Apple.
Apple is not involved in any capacity with processing Apple Pay transactions when you tap your device in a business.
You have no idea what you're talking about and I'm done repeating myself.
Hey, exciting to see people so passionate about this! The other user is correct that Apple is not involved with the processing of purchase transactions. Pulled this from LinkedIn:
Top portion is the provisioning flow, bottom portion is the purchase transaction flow. As you can see the transaction is between the customer, acquirer, card network, and issuing bank. Apple involvement not required as the card network does the work of decrypting the payment token.
So the other user’s statement that
Apple is not involved in any capacity with processing transactions when you tap your device in a business.
Is accurate.
That graphic is really good. I've seen a lot of graphics that try to explain it but most of them make mistakes; that one is surprisingly perfect.
The other user is correct that Apple is not involved with the processing of purchase transactions. Pulled this from LinkedIn:
Bruh there is a giant icon that says "Apple servers" in that photo so I have no idea what you're talking about.
It's literally called "Apple Pay" and you're gonna try to convince me that Apple has nothing to do with processing payments? Not likely.
Are credit card providers also using Apple servers to not process payments? Because that is what the other user also claimed.
Bruh there is a giant icon that says "Apple servers" in that photo so I have no idea what you're talking about.
Yes, that is correct. As I pointed out, the top flow in the graphic is the provisioning flow, the flow by which Apple Pay payment credentials (device primary account number, DPAN) are created.
The bottom flow is a purchase transaction flow, that’s what occurs when a user is making a purchase transaction at a store. There is no involvement from Apple Pay servers in processing those transactions. Credentials are sent from the device, to the point of sale terminal, to the acquirer, to the card network, to the card issuer, and back again.
It's literally called "Apple Pay" and you're gonna try to convince me that Apple has nothing to do with processing payments? Not likely.
In case you’re not just trolling, I encourage you to learn more about this topic. It’s pretty cool how Apple Pay works.
I’ve clearly done far more research than you have
I feel like I've entered some Twilight Zone. You just keep repeating the same absurd claims about something but if you had ever researched it in any capacity you'd know how false those claims are.
No they don’t. The vast majority don’t even accept Apple, Google, or Samsung Pay, credit cards only.
"Apple Pay is accepted at over 85 percent of retailers in the U.S."
Look, it's really simple: If a store accepts contactless cards, it by definition accepts Apple Pay. They are the same thing to the merchant. There are zero merchants that take contactless cards but can't take Apple Pay.
As for costs, a random sampling:
One great benefit of using Apple Pay is that it doesn’t cost business owners anything extra. Payment processors consider it a normal credit card transaction, so you’ll only pay regular card processing fees. The only upfront cost involved might be upgrading your POS terminal.
Once you have the right contactless payment-capable POS, there are no additional fees you, the merchant, will have to pay for using Apple Pay. As a business owner, you will pay the same credit card rates and fees as you would for a card-present transaction.
Higher rates? Do customers pay more for using Apple Pay than any other solution where you are from?
I know shops pay a fee, but never heard it to be on the customer to pay.
It's common in Australia to tell customers that cc card fees are added to the bill. Not everywhere but also not surprise.
Your country + my country is a small share of global market, unless you're in China.
Well but guess where the merchants get their money to pay for that expense. If it increases the business's cost, it ends up being paid by the final consumer.
Apple Pay doesn’t increase the business’s cost.
The higher rates are passed on to the merchant to eat, just like any other payment processors.
But the merchant is in charge of what payments are accepted.
To the consumer, it will be no different. Apple will just be cut out as the useless middleman they are.