Problems for Apple

[Josieb1]

I'm in the UK so a lot of what is going on in the US is not happening here ( I think) but I won't use any kind of payment system built into my iPhone or any app. I use a credit card or a pre pay card (I.e. Starbucks) I don't trust any payment systems that work through just presenting my phone at a terminal.

[Shane R]

Originally Posted by tubemonkey

It won't happen until they can find an easier way to implement it. Using a smartphone leaves too many gaps. What about those who don't use them? To replace a credit card, they need a device that's small enough to fit in a wallet or on a keychain.

Agreed. I don't think they'll ever go away - the credit card companies are introducing new credit card versions of what the iPhone (and Android phones) do. Checks won't completely go away, cash won't ever go away (obviously), and neither will plastic.

The electronic wallets are just another way of paying.

[Shane R]

Originally Posted by Fbone

The media is also reporting that Apple negotiated bank fees of 1.5% instead of their usual 2-3% because Apple Pay is designed to be more secure.

Important to note: Apple is paid by the CC companies, not the merchants. So unless you're paying a fee for your card already, no additional fees are being passed along to you. I heard it was <1%.

[Prestidigitweeze]

I'm not a spittle-flinging fan of phone or card-flashing payment systems, but this one sounds reasonably secure -- provided that you can keep other foonts from triggering payments by humanhandling your device from afar (the possibility of which, given the scope of Shellshock, leaves me feeling a wee Hank leery).

[pidgeon92]

I got my iPhone 6 yesterday. I'm looking forward to trying out Apple Pay the next time I go to Whole Foods.

[taustin]

Originally Posted by Andrew H.

Apple doesn't charge the merchant anything to use Apple pay. The bank pays .15% of the transaction to Apple for Apple pay. This the difference between a card-not-present and card-present transaction - basically, the bank is accepting the card-present fee for use of Apple Pay, even though it is technically a card-not-present transaction.

So the merchant is paying the "card not present" fee when the customer is standing in front of them (and they would, therefore, usually pay the "card present" fee, which is lower)?

Apple may not be charging the merchant, but the merchant service is, from the wounds of it. And if it's more expensive, it's more expensive, regardless of who gets it.

[taustin]

Originally Posted by Fbone

The media is also reporting that Apple negotiated bank fees of 1.5% instead of their usual 2-3% because Apple Pay is designed to be more secure.

The media also regularly reports on UFOs and Bigfoot. Is there a credible source to support that?

[taustin]

Originally Posted by tubemonkey

It won't happen until they can find an easier way to implement it. Using a smartphone leaves too many gaps. What about those who don't use them? To replace a credit card, they need a device that's small enough to fit in a wallet or on a keychain.

It's (replacing traditional magnetic strip credit cards) already in progress, now that we're over a decade behind Europe. By October of next year, all merchants are required to have equipment capable of handling chip cards, and around that time, all new cards issued will be chip cards. It takes a long, long time to change the basic structure of such a widely used system, but it's happening.

[taustin]

Originally Posted by Shane R

cash won't ever go away (obviously),

While I agree it will never go entirely away, there are places that are getting very close. Only 3% of transactions in Sweden are cash these days, and bank robberies have dropped by an order of magnitude since 2008 because most banks don't handle cash any more. Even churches take plastic.

Apparently, Somaliland is the leading user of mobile payment systems these days.

http://www.totalpayments.org/2013/07...ess-countries/

[tubemonkey]

Apple Pay Rival and Walmart-backed MCX Hacked, User Emails Snatched

Merchant Customer Exchange (MCX), a partnership between retailers including Rite Aid, Sears and Walmart that’s building an Apple Pay competitor, notified customers today that it had been hacked.

MCX, which describes itself as “the only merchant-owned mobile commerce network built to streamline the customer shopping experience,” told users that a third party had gained access to customer email addresses and that it had learned of the breach in the last 36 hours. The Needham, Mass.-based company is currently beta testing its main product, CurrentC, an app that will allow users to pay at physical retail stores with their phones.

[fjtorres]

Originally Posted by tubemonkey

Apple Pay Rival and Walmart-backed MCX Hacked, User Emails Snatched

Don't mess with Apple. They have ways of getting even.

"RELEASE THE HACKER!!"
http://www.youtube.com/watch?v=gb2zIR2rvRQ

[Fbone]

Originally Posted by taustin

The media also regularly reports on UFOs and Bigfoot. Is there a credible source to support that?

http://bankinnovation.net/2014/09/ap...rom-big-banks/

[taustin]

Originally Posted by Fbone

http://bankinnovation.net/2014/09/ap...rom-big-banks/

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.

[Shane R]

Originally Posted by taustin

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.

With the exception of the phone based security mechanisms (TouchID and the Secure Element) the implementation is almost 100% designed by the financial guys, not Apple.

That's why it works with terminals already in place for the last two or three years.

[ApK]

Originally Posted by tubemonkey

It gets me cash back at the end of the year, doubles the warranty on purchases, and offers other discounts I take advantage of. Float has great value for me.

I've tried that but it always ends up getting us into trouble.
Now we're trying to use the debit card for everything, and keep the CC only for emergencies.

And we're trying hard to make sure stuff like "lobster dinner" or "bigger TV" doesn't get classified as 'emergencies.'