Quote:
Originally Posted by Fbone
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That's a very confusing article, but I don't think it's talking about the fees the retailers pay. I'm not entirely sure it's not confusing two different things entirely - Apple Pay vs. what Apple pays for its own credit card processing fees in iTunes and their own retail operations.
It
seems to be implying that when you use Apple Pay, the actual processing of the credit card is handled by Apple as a processor, which is not what
every other article says. If that is correct, then the article is talking about the fees that
Apple pays, not the fees charged to retailers.
I really can't tell what it's talking about, though.
This has a fairly detailed explanation of how it all works, which makes sense. The conclusion that I reach, however, is that Apple adds no value to the process other than marketing - they will have people sign up simply because it's Apple. The exact same infrastructure, once it's deployed, could also be turned in to a normal branded affiliate system - Visa, MasterCard, whoever, could let Microsoft have access to it for Microsoft Pay (trademarks notwithstanding), or McDonald's for McDonald's Pay, and so on. Once the customer is signed up, Apple does nothing more except collect their money. Apple isn't even involved in generating the token. The only service they provide is the form you fill out.
(Note that this Kirk Lennon guy seems not especially well informed about the changes coming with the EMV stuff, or other changes taking place right now. My employer just changed to a system - using magstrip cards, mind you - where we don't see the card information at all because it's encrypted on the pad. Once our historical archives age out, we'll no longer have anything to steal anyway. As Lennon points out, the pads
can be compromised, but it's non-trivial to do so, and only at retailers that do their own programming of the pads, which is a
very small number. Most rely on their point of sale vendor, who in turn, rely on the hardware manufacturer. Tampering with the pads is very difficult, as well, and pretty much impossible on any scale unless you are the manufacturer.)
Apple's not innovating anything here, they're using ideas that have been around a while,
and are already being deployed. They're a bit ahead of the curve in some says, and they're very good at making things that work well for the customer. Whether or not that works out for the retailers, and is worth the cut they're getting, time will tell.