Bank chief executives fawned about the “exceptional customer experience” and the “exciting move”. They are also paying hard cash for the privilege of being involved: 15 cents of a $100 purchase will go to the iPhone maker, according to two people familiar with the terms of the agreement, which are not public. That is an unprecedented deal, giving Apple a share of the payments’ economics that rivals such as Google do not get for their services.
That means that every time you use your iPhone 6 or iPhone 6 Plus to check out at a supported vendor, a feature which is likely going to save you time, Apple is positioned to build a new revenue stream of its own for facilitating the transaction.
The report that Apple is collecting such a rate for each purchase follows a previous report from Bank Innovation from before Apple announced its new Apple Pay service that the company had negotiated transaction fee discounts with participating major banks. Part of that deal was built on offering “card present” rates despite not requiring the card to be present during the transaction.
This morning we learned that Apple Pay is headed for China through a partnership with UnionPay, as revealed by code in iOS.
The mobile payment system is said to be available next month for iPhone 6 and iPhone 6 Plus users. In 2015, the Apple Watch release will allow users of that product and iPhone 5, iPhone 5c, or iPhone 5s to use Apple Pay as well.