The Financial Times has an interesting detail not disclosed or previously reported about Apple’s new payment system introduced earlier this week and due out next month. Through Apple Pay, which uses a combination of NFC and Touch ID for authorizing mobile payments, the iPhone maker will collect 0.15% of each transaction that goes through the service.
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.
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Time to invest in Apple asap. yikes what a massive revenue stream
A nice revenue stream but not massive. A billion dollars in transactions only equates to $1.5 mil for Apple. That’s pennies in Apple’s world.
Wrong Visa alone accounted for 3.2 TRILLION spent in 2010. Five years down the road apple will be collecting off trillions not billions.
Why are you using the B word? That’s a few orders of magnitude too small. ;)
$15 million, actually. And they’ll be collecting on hundreds of billions, it’s going to be a huge revenue stream for Apple.
I’d be careful about giving financial advice.
Really, why should I be careful? I’d wager only one of us has a finance degree and only one of us knows that my comment offered no guarantee of investment returns. No wonder you use android, you lack education.
You should be careful about shamesung, their mobile division is going to fall in about 1 – 2 year. GL.
Psst: “0.0015”, not 0.15.
Psst 2: Ah well, I’m tired. Move on people, nothing to see here.
wow! That’s 5x what “analysts” were predicting!!! Most were expecting 3 basis points, the hast was only 6.
hast = highest, not sure how I managed that one…
up to I looked at the receipt which was of $9529 , I did not believe that…my… brother woz like they say realey erning money parttime at there labtop. . there uncle had bean doing this for under 9 months and a short time ago repayed the mortgage on their home and got Lexus LS400 . look at here …………………….. ᵂᵂᵂ.moneykin.ᶜᴼᴹ
Probably a marketing agreement, I advertise you for the low or free for a smidgin (I’m southern) of everlasting transactions
This will help push the prices of consumer goods higher. No bank or merchant is going to give up their a slice of the pie.
It will probably be a decade before mobile payments overtake use of credit cards or cash around the world.
I don’t see it being the timesaver that everyone here predicts. It certainly won’t be for consumers who, face it, are dumb.
I presume Apple has done its due diligence as it delves into becoming a financial transaction company.
We know that becoming a health tech company is very difficult, in part because of consumer protection efforts.
If I were an Apple fan or onto tech stock I would not buy because of this announcement, I’m sure that people with money (not you) already know about this. The ship has sailed.
You are definitely dumber than you look.
I have the same opinion on his posts Bruno. No logic, such a paid troll that should be highly ashamed of himself. Herb, just to tell you, you don’t know what fees other companies take right? 0.15% is a joke, it’s that small!
It’s .0015. Learn math.
yes but he said for every 100 dollars, not every dollar… so it would be 15 cents..
0.15% = 0.0015 in decimal form. Unless the article was updated it looks correctly written.
Great articlr on why you dont need Apple pay:
http://www.slate.com/blogs/moneybox/2014/09/12/the_case_against_apple_pay_its_new_mobile_wallet.html
Quote directly from the article:
“The iPhone’s fingerprint-only payment access and the “tokenization” feature of Apple Pay are two features that could help stave off the recurring massive thefts of consumer data from retailers.”
Not having to worry about theft of my credit card data, which has happened to me on at least two occasions and wastes tons of time to correct, is more than worth it for me to use Apple Pay for everything I can going forward. This is also a feature distinct to Apple Pay relative to the previous versions offered by Google Wallet and others. Apple gets it right, and of course no surprise you’re wrong yet again.
P.S. No matter how much you troll, you can never go back in time and make your mother love you. Seek therapy and take up a more productive hobby.
Have you not seen the news lately…? All of the credit card fraud??? Home Depot, Target?? It’s obvious that was doing it to make money but it also creates a more secure transaction! You would understand this if you ever had your identity stolen and/or credit card theft! THANK YOU APPLE PAY
The Slate, un-purposely, stated the reason why not necessarily you but issuers will buy in like crazy in a solution like Apple Pay… What’s percentage of the total amount of fraudulent charges to total credit & debit transactions? Who’s bottom line is hitting directly? Where’s more prevalent? Pushing Apple solution they are buying cheap insurance without deductible.
And if Apple is able to pull the magic card and solve it for nonpresential transactions (eCommerce & Over the phone transactions) where the rate fraud is much higher, the 0.15% is going to be the cheapest insurance they ever got (and mind no uncertainty).
If consumers are no longer afraid to hand their token on Internet, transactions are going to sky rocket and you know who’ll collecting the latest share of that pie (not Apple) but the issuers. I feel kind of sorry for the PayPal and the likes… But heck, since Elon Musk sold it, they have been living in the past… In retrospective, It’s logical that he wanted to leave PayPal as soon as he could.
The truth is, Apple are a business, and for all the talk and polish, are not as ethical as they or their fanbois would like to make out. A few facts: 1. As a recently released recording of a management meeting proves, their money men LOVE the fragile displays on the iPhones. Almost everyone I know, in particular the young, has shattered their screen, despite all the ‘Gorilla’ glass hype. That’s £100 or more to Apple for a repair, no, you cannot claim it under warranty nor claim on your insurance! 2. The white cables and other iAccessories branded by Appel, are priced at several orders of magnitude higher than their build cost. Example, the lightning to microUSB adapter, £15. Are you kidding me? That’s 30p (50cents) of parts at the most! John Sculley, former CEO of Apple used to sell an unhealthy soda pop with that sort of markup before Steve poached him. Oh the irony! 3. The iPhone 5c has been been hit with 8GB of RAM, ruining the device and conning the poor into buying an iPhone at a knock down price, but little do they know, the 5c 8GB will become unusable after an OS upgrade and the installation of a few apps. (Try it!) 4. iTunes and iCloud are both atrocious in their execution, causing havoc with content management, although few Apple users will admit this for fear of a backlash. I could go on. But the killer is the whole Apple Pay thing – it is 100% unnecessary! What’s the point of paying for something with your gadget? What if the gadget breaks or is stolen, or the battery dies? As Barclays (UK) have proven with the launch of their clever blood vessel sensing biometric security device for business account users, you don’t actually NEED a device to pay for anything, just the shop/cafe etc to feature a biometric reader at the till! So you can turn up in the nude and do business! (No, not that type, I mean buy something!) Stick you finger in the hole or gaze into the eyepiece, and Bob’s your confused Auntie, you have purchased a skinny latte in your birthday suit. No iDevice required! And no garden wall, just a transaction between your body and your bank.
If there’s a war anywhere outside of continental Europe, you know it’s about oil. If Apple launch something that forces you into a garden, you know it’s about money.
My wife and I have owned at least 6 iPhones between us. Dropped each phone about a dozen times, ever broke our screen once.
It’s called being an adult and buying a $5 rubber case.
While I have never dropped a cell phone so I really don’t have a dog in the fight.
But it would probably cost apple less than $5 to make their phones last a better after a drop.
It’s almost like having to buy bumpers after you’ve bought a car. Is that OK with you?
Have you noticed your phone slows down with each “update”? You’re not alone.
Given how often you and your wife have dropped your phones maybe you need a case with better grip.
Or wash your hands before picking up your phone.
I’ve drop my iPhone 5s about 10 times and it has not broken the screen, my S3 broke with one drop. The 4 and 4s were bad but the latest holds up just as well as any other device out there.
Oh and I don’t use a case for any of them.
Herbie herbie. You need to get your facts correct. Look at yt and you’ll see 5s is much doable than any shamsung crap ;)
So you had to buy a case? So you choose a phone that is very pleasing to look at, and cover it up, and also make it thicker at the same time? Do you cover your car in rubber? No. My point is made.
1. You used the letters “boi”
2. You don’t know how to space paragraphs.
3. No need to read past the first sentence.
4. Good luck with your life.
1. ‘fanboi’ is a term used in tech blogs for fans of various platforms, such as iOS vs Android, Mac vs PC etc. (I’m in the Mac camp, despite my comment. But prefer Android for mobile.)
2. I posted in a hurry, possibly from a phone. I am more than capable, given time, of making a better job of my use of English and paragraphs. Sorry for any inconvenience.
3. ?
4. You’re very kind. You too!
What recording are you spewing about? Please link.
Btw: Your wall of text reads like you’re a paid shill…
Add usual and this is fairly unique within the tech blogs, 9to5mac and their readers are stupidly biased to incapable of looking at this from outside the RDF. (Reality Distortion Field.) Actually I pay Apple. I must have owned about 20 of their laptops and misc other devices, including a £15 microUSB to Lightning adapter. I make my own observations and also listen to what other users on both sides of the spectrum have to say. I stand by all my comments.
No phone, to my knowledge has 8GB of RAM. Sorry pal. Also I’ve had the 4 and 5, dropped them a few times at most and never damaged the screen. I had both for their 2 year contracts and never once used a case. I’d love to hear more about how bad iTunes is though.
1. Here in the UK, the iPhone 5c base model has 8GB, and next week, when the 6 is in the shops, (this confirmed by several staff at the Apple Store, Reading yesterday, where I was buying a 32GB iPhone 5c for a relative), ONLY the 8GB 5c will be available. The 16 & 32GB will be withdrawn. They want you to buy the metal ones, a pity, because the 5c is great if you have kids.
I think you misunderstood me. There is no phone with 8GB of Random Access Memory. Fact.
Basically Oflife, if you don’t know the difference between RAM and the iPhone storage capacity then I can’t expect you to have anything informative to say about iTunes and iCloud. Plus you’re from the UK, as am I, which means there’s no language barrier, just a lack-of-knowledge barrier.
So, again: What “released recording of a management meeting” are you talking about?? Please link.
Until you do, I stand by my comment that you sound like a paid shill. Additionally, it doesn’t matter if you “listen” to both sides of the isle (and if you truly do, you’re ignorant of your own RDF) as the blabber your speaking about doesn’t have facts or depth to it.
Example “what if the device is lost?” It was explained in the keynote. No Card Data is stored on the device. So while it sucks to lose your phone, your data is secure. Additionally you can remotely wipe your device via iCloud. The fact that you seem to either ignore or are unaware of these basic simple facts makes me think you dont listen very well and creating your own RDF, or you’re a paid shill…
Paid by whome? Where? Which bank account? How much? Re Apple Pay, you fail to get my point. It’s not about security It’s about convenience and neutrality. The recording was referenced in another tech blog. Companies are always exploiting their customers, this is not an Apple unique policy.
First of all I kind of hate myself right now for buying into your nonsense and even replying to this…
But here goes, 1: have you ever tried to get a Samsung product repaired or replaced.? You might as well shoot yourself in the foot. You have to jump through hoops and rings of fire and be without a phone for several weeks or months. Apple has the best customer service/repair of any product out there! 2: Apple play is an option! You don’t have to use it. 3: as I stated before in an earlier post credit card fraud and identity theft is at an all-time high, just ask customers at Home Depot and Target… Do you not see the benefits of a process like this? Obviously you don’t, you’re too blinded by your jealousy because your ego and pride won’t let you convert to an iPhone… And the last time I checked, you’re just another trolling Shamesung user on an Apple Forum!
Actually I happen to currently own an LG G3 which happens to be pretty good. I have also had isssues with Samsung who I have no respect for. I also agree about Apple support and in store customer service. So once again, I am not stating Apple are the only flawed entity. Yes Apple Pay is optional but I stand by my initial comment that biometric security is the best way forward.
This story needs lots more media coverage. AAPL has already rallied back, now we need the push to 150.
Yea, more coverage of how this will cost the consumer more. Read the Slate article.
Crapie crap you talk…
Contact less payments is old. Apple is late to the game – why would analysts go crazy over them just catching up? This isn’t a game changer – its not revolutionary – it’d using nfc which apple once said they would never do, but since their ibeacon and passbook has been a failure. ..they are forced to bow play with the big boys. I’m not certain about the USA. …but in other countries…contact less payments, just as easy as this…have been less than slow in take up. People will always carry their cards with them…particularly if they own an iPhone with its terrible battery life – it isn’t going tO replace the use of cards. It’s like an iwatch – no one wants a fitness device that requires you to carry a phone that also does the same thing the watch does. Double handling is not efficient – apple hasn’t solved any problems here.
Looking at a situation objectively, is something worth considering. Similar to how the article on Slate approaches the topic on Apple Pay. One should have been taught to never propose fact, unless it is actually true. “People will always carry their cards with them”, don’t speak for people, don’t put words in my mouth.
You may have been using NFC on your Android phone for some time, but I don’t see banks collaborating, in similar efforts, in implementation and advertising of Google Wallet. One can’t just throw technology at a problem, and expect it to resolve itself.
I still remember my first Visa PayWave card, you are right, contactless payments have been around for a while. Taking an old idea, and trying to implement it in a new way, in efforts to help society, is not something to reprimand. Let the idea at least have a chance to either fail, or succeed, before putting it down or praising it.
In other words, constructive and intelligible comments tend to be more enjoyable to read.
Luis, you are completely right.
You must know that Herb02135go is a troll who always talks badly about things. But it’s his opinion and we have to respect this. But we don’t need to respond and give him what he wants. I think kobymac is his friend ;o))
By the way. These days I’m a little sad to live in Germany because the US is much more forward thinking in Business than we are. I hope Apple pay will reach Germany soon.
Luis, I share your opinion.
Hudo !
You know that payment are made for several years in Japan with the Smartphone?
True no one has tried to replace credit cards as Apple is doing. However what apple is saying is it saves a stack of time – I just cant see that happening. The apple pay system will still have to connect to a bank, which is the only time consuming part of currently using a card. I know the USA still isnt completely on chip and pin – but on a decent machine, chip and pin can be done in a few seconds. Its not a huge problem. They are implying that you would leave all of your cards at home. That just wouldnt happen because not everyone is going to bother getting the required equipment in their shop…and you arent going to go out at night, then realise you cant get home because your phone is dead and the cab driver doesnt have a charger in there. Paywave, paypass and androids implementations are where people will use it if they are going to use it – for small transactions. For large transactions…the effort of turning on your phone, selecting the app, selecting the card you want to use….isnt going to save any time over the manual way. Based on maps, siri, ibeacon etc. Apple hasnt been able to nail any new feature….years after they introduced them. This one has the least potential out of all of them. And one things for sure like most apple features – they just wont work out of the USA.
Why… Are people so thick?
Apple is rarely ever first. They’re just the best. Here’s a popular saying that you might be able to understand.
“Always outnumbered, but never outgunned.”
That’s Apple in one sentence.
In the case of mobile contactless payments however, Apple is indeed first with an end-to-end fully secure implementation with both obfuscation and biometric security. But that doesn’t matter, as given the state of the industry, first or not, they’re going to be the biggest. And more importantly to me, they’re the only ons getting paid. Which spells a great future for the company, which means more reason for their stock to rise, which means more money in my pocket.
And what’s better than more money? More money. Money money money. Like rain.
Meanwhile, in Android town, there’s a drought and companies are donating blood to make ends meet. Who will be the big Android players when all the current ones price themselves out of profitability and out of the market? Maybe you’ll trust Huawai or ZTE or Xaomi with your financial transactions.
Good luck with that.
Also, because you’re obviously too preoccupied and busy to actually read any information or discover any facts on your own…
You’re taling abut all the shortcomings of the various options for Android while trying to shoehorn them to Apple Pay. Sorry, you haven’t mentioned one single correct fact about Apple’s new implementation.
You don’t have to load an app. You don’t have to unlock the phone. Hell, you don’t even need to turn on the screen or wake it up. You put your finger on the button and hold the phone near the terminal. Exactly the same as using an NFC equipped credit card, except no one sees the card, and only YOU can actually do it thanks to TouchID (the finger print sensors because I know you haven’t followed any Apple tech to know what that is).
Look, make all the prognostications you want. Shout them from the rooftops. Just promise me ONE things. I’d like to to feel shameful, hurt and like a total and complete incompetent when everyone the world over sees that Apple has pushed this technology to the mainstream and remains the leader in its use.
Please clarify, because $15 out of every 100 = 15%, not .15%. Since credit cards currently take between 2 and 4% per transaction, I’m guessing it’s the much more modest .15%, which is more like 15 cents per 100, which will add up nicely across hundreds of millions of users’ transactions, while not threatening retailers’ bottom lines.
Correct sir.
The credit card companies i’m sure see it as paying a small fee in turn for a secure transaction that will not put the users credit card info out there to be stolen. Without the chance of credit card theft, the credit card companies will not have to eat costs of someone stealing your CC# and running up a huge bill, then also pay for costs to investigate the theft.
I’m sure its probably just a short term deal that they have made with apple. This gets security out to the customer via stores that already accept NFC payments before the big rollout of the new chip and pin card systems that will be required next year.
It so small percentage ;) For example in Estonia, if you pay with your Visa card in shop payment terminal bank earns from one transaction 1-3% (depends from shop contract and payments number). Commonly used percentage is 1.8-2% from transaction.
If Apple only takes 0.15%, I am in ;)