mobile payment system

Ahead of Apple’s entry into the mobile payment space next month with the release of Apple Pay for iPhone 6 and iPhone 6 Plus users, Apple has joined the GlobalPlatform, the non-profit association focused on standards for secure chip technology across various industries, as a full member.

Existing members of GlobalPlatform include various Apple partners and competitors alike with carriers AT&T, Sprint, and Verizon being members as well as handset makers Samsung and BlackBerry. More importantly, Apple Pay partners American Express, MasterCard, and Visa are also members; Discover, which is not yet an Apple Pay partner but has said it is discussions over participation with Apple, is also a member.
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Financial site Bank Innovation reports that Apple has negotiated lower transaction fees with American Express, Bank of America, Capital One, Citigroup, and JP Morgan Chase ahead of the debut of its mobile payment system expected to be announced alongside the new iPhone models next week. The report notes that the banks were likely willing to lower rates to ensure participation and due to Apple’s security measures including the iPhone’s Touch ID sensor.

The first thing Apple has done is convince these four FIs to consider transactions from Apple’s upcoming payments venture — said to launch with its forthcoming iPhone 6 introduction — as “card present” transactions, which carry a lower discount rate than “card not present” transactions, because of lower fraud risk.

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