A new report from Sanjay Sakhrani of KBW and detailed by Bezinga claims to share details of Apple’s contract with card issuers for Apple Pay. In addition to sharing details on Apple’s cut of transactions, the report highlights requirements from Apple’s terms and conditions that card issuers must follow to participate in the new payments service.
Among the terms, card issuers reportedly “must allow at least 95 percent of the cards in their portfolio to participate in Apple Pay,” which the report points out might not include ATM or gift cards. Apple previously posted a support document detailing supported card types through initial launch banks. It hasn’t yet, however, updated to reflect a number of additional banks that started supporting the service earlier today.
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The report adds that Visa and MasterCard are playing a “large operational role for Apple which extends beyond the security aspect of tokenization.” Some of the specifics from the terms below:
- On behalf of Apple, the networks will collect the portion of interchange owed to the company from the issues and will only then pass along the fees to Apple.
- Issuers must allow at least 95 percent of the cards in their portfolio to participate in Apple Pay, which may not necessarily include gift cards or ATM-only cards.
- Apple has the ability to request up to two times a year that the amounts the issuers pay are accurate. Apple reserves the rights to seek advice from independent auditors to verify accuracy.
- Issuers must supply Apple with various data statistics in nearly three dozen categories, including transaction and purchase volume data, top 100 merchants by purchase volume and average ticket.
As for transaction fees, Sakhrani says Apple is getting 15 basis points per credit card transaction (lining up with previous reports) and half a penny for each debit transaction.