Banks couldn’t jump onboard the launch of Apple Pay contactless payments when it launched back in 2014, but now they have regrets and are pressuring Visa to trim Apple Pay fees.
AnnaMaria Andriotis for The Wall Street Journal:
When Apple Pay launched, the tech giant got big banks including JPMorgan Chase & Co., Capital One Financial Corp. and Bank of America Corp. to agree to pay fees that would allow their cardholders to pay by iPhone. But some banks have grown unhappy with the costs, especially after Apple Inc. introduced its own new credit card in 2019, according to people familiar with the matter.
Some banks are pushing back, nudging card network Visa Inc. to change the way it processes certain Apple Pay transactions, according to some of the people. The change would trim the fees that banks pay to Apple.
Visa plans to implement the change next year, according to people familiar with the matter and a document viewed by The Wall Street Journal. Apple executives have told Visa executives they oppose the change, the people said. The two companies are in discussions and it is possible the planned change won’t kick in.Currently, banks pay Apple a fee when their cardholders use Apple Pay. Under the planned new process, the fees wouldn’t apply on automatic recurring payments such as gym memberships and streaming services… When consumers load their credit card onto Apple Pay, Visa issues a special token that replaces the card number. That allows the card to work on Apple Pay and also helps keep the card secure in a potential data breach, among other benefits. Visa plans to start using a different token on recurring automated payments. That effectively means that after a first payment is made on a subscription, Apple won’t get fees on the following transactions.
MacDailyNews Take: Shockingly, it turns out that bankers are greedy.
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Part of the deal was that Apple would reimburse any fraudulent use of Apple Pay. Are the banks asking Apple to stop doing that too?
Thought not.
This depends on how you look at it. Depending on the cost of the “fee”, if this is allowing Apple to rake in millions merely because someone “Taps” a transaction using a Visa card linked to their IPhone or Apple Watch, and Visa felt like it concurred to lower the fee, and Apple is going wait a minute, who’s the “greedy” one? I think its Apple..
Why should the Banks have to pay anything? Seems like either Apple should pay or the customer.
You sir do not understand how credit cards work. Users DO pay, the fees the bank “charges” are just parts of their “cut” of what they take from the Users. 3.5% of most most transactions (and often a small set fee) go to all the folks “involved” in the transaction. Visa knows its just a matter of time and some “tweaks” to some banking regulations and Apple will be able to cut Visa out of the transaction all together. Obviously Visa is trying to keep Apple “happy” and prolong its ill gotten gains for as long as possible.
I take it you mean “users” as in the merchant, not the customer.
Banks have stockholders just like Apple and Visa do. Apple is just as “greedy”, and as I stockholder I am glad.
Banks are the meanest, deadliest vipers in the world. Anytime Apple can cut them out of the pie is good thing.
All world banks can rot in hell.