Apple Pay Cash leverages Discover Network for new virtual debit card

AppleInsider

In order to bring the Apple Pay Cash debit card to life, Apple has utilized credit card provider Discover, whose Discover Network debit services power the virtual tap-to-pay card for money transfers and in-store purchases.

Apple Pay Cash transactions are handled through the Discover Network payment network, a division of Discover Card. Discover is the fourth-largest credit card brand in the U.S., behind Visa, MasterCard and American Express, boasting nearly 44 million customers as of mid-2016.

Discover officially announced its relationship on Tuesday, soon after Apple Pay Cash officially went live in the U.S.

Users can also open the iOS Settings application, then Wallet, and select their Apple Pay Cash card to see under "Card Details" that the virtual debit card is powered by "Discover Debit." By default, the card has a PIN number of "0000" that cannot be changed, for when Apple Pay is used at a terminal that requires a PIN number for debit transactions.

Apple Pay Cash card services are provided by Green Dot Bank, while the debit card rails are handled through the Discover Network.

Users must still have a separate credit or debit card to transfer money to an Apple Pay Cash card -- as of Tuesday's launch, there is no way to transfer funds directly from a bank to the Apple card. Money saved to Apple Pay Cash can, however, be transferred off of the card and into a bank account.

By default, funds received through Apple Pay Cash are stored on the card where they can be spent at the store, as with a normal debit card, or transferred to a bank account.

Though retail purchases are possible with Apple Pay Cash, the service's primary function is an easy way to transfer money between friends through iMessage. With iOS 11.2 and watchOS 4.2, the Apple Pay Cash app for iMessage enables money person-to-person money transfers from within a text message conversation.

The new service is Apple's response to existing offerings like Venmo and Square Cash.

For years, Discover has been quick to adopt new capabilities as they launch in iOS through its own app, including features like Touch ID and later Face ID, as well as widgets and watchOS support. In October, the company began allowing customers to claim cashback bonuses for Apple Pay transactions directly through the iPhone's Wallet app.

MustSeeUHDTV

Discover. That's is good. At least that is a reputable big credit card company. I thought it was supposed to be Green Dot.

racoleman29

Why not Visa or MC? Just curious.

nhughes

MustSeeUHDTV said:

Discover. That's is good. At least that is a reputable big credit card company. I thought it was supposed to be Green Dot.

From what I can gather, Green Dot is the bank and Discover debit rails (Pulse) are being used. Leveraging Discover debit should, in theory, allow Apple Pay Cash to be used at retail in more places than Discover credit.

nhughes

racoleman29 said:

Why not Visa or MC? Just curious.

Probably because Green Dot uses Discover. But, from a consumer perspective, the payment network means more, as it determines where a card can or cannot be used.

doozydozen

nhughes said:

racoleman29 said:

Why not Visa or MC? Just curious.

Probably because Green Dot uses Discover. But, from a consumer perspective, the payment network means more, as it determines where a card can or cannot be used.

So, if a retailer does not except Discover, Apple Pay Cash will therefore not be accepted??

nhughes

repressthis said:

nhughes said:

racoleman29 said:

Why not Visa or MC? Just curious.

Probably because Green Dot uses Discover. But, from a consumer perspective, the payment network means more, as it determines where a card can or cannot be used.

So, if a retailer does not except Discover, Apple Pay Cash will therefore not be accepted??

This is what I don't know the answer to, and am trying to find out.

As I said in the previous comment, the fact that Apple Pay Cash uses Discover debit (Pulse) suggests that it would be more widely accepted than Discover credit (which has limited reach vs. its competitors). Pulse debit is pretty widely accepted.

If anyone knows of any retailers that accept Apple Pay/NFC but *do not* accept Discover card, then we can find out if it's a problem. But I'm guessing the number of companies that fall in that Venn diagram overlap is pretty low.

zimmie

MustSeeUHDTV said:

Discover. That's is good. At least that is a reputable big credit card company. I thought it was supposed to be Green Dot.

Credit cards are almost unimaginably awful behind the scenes. When you swipe your card, it goes through a huge number of hands. The merchant, the terminal vendor, sometimes a terminal network, sometimes an aggregator, the payment processor, the card brand, then finally the backing bank. Each one of these middle-men takes a cut of the transaction, and each of them potentially see your personal data.

In this case, Discover would be the card brand, then Green Dot would be the backing bank.

mknelson

MustSeeUHDTV said:

Discover. That's is good. At least that is a reputable big credit card company. I thought it was supposed to be Green Dot.

From the Wiki: "At the time the Discover Card was introduced, Sears was the largest retailer in the United States."

They sold off their financial services including Discover in 1993… And now Sears is dead in Canada and on life support in the US?

How things change.

techno

Are these person to person cash transfers considered a cash advance by the credit card company or a normal purchase? 

mpantone

techno said:

Are these person to person cash transfers considered a cash advance by the credit card company or a normal purchase? 

They are seen as normal purchases. You will not pay exorbitant cash advance interest rates if you tie your Apple Pay Cash account to a credit card. You will pay a fairly normal 3% fee.

If you use a debit card instead, there is no 3% fee. This has been covered time and time again in the various discussions about this service, dating back to the original developer beta in June.

For more details, please read the Green Dot Bank fine print.

jbdragon

MoviePass used to use Discover also, and not to long ago switched to MasterCard. For those that don't know, MoviePass dropped their subscription costs. I think I was paying about $45 a month after it went up in price from $35 for me. It's dropped way down to a unbelievable $9.95 a month now!!!! That's the price of 1 ticket, maybe less. There are no “blackout” dates. As a MoviePass member, you can see up to one standard 2D film per calendar day.

https://www.moviepass.com/

I've been using the service for a number of years, but now it's almost like why wouldn't you? Why they went from Discover to MasterCard?!?! I wonder what Apple will use for outside of the U.S.?

SpamSandwich

jbdragon said:

MoviePass used to use Discover also, and not to long ago switched to MasterCard. For those that don't know, MoviePass dropped their subscription costs. I think I was paying about $45 a month after it went up in price from $35 for me. It's dropped way down to a unbelievable $9.95 a month now!!!! That's the price of 1 ticket, maybe less. There are no “blackout” dates. As a MoviePass member, you can see up to one standard 2D film per calendar day.

https://www.moviepass.com/

I've been using the service for a number of years, but now it's almost like why wouldn't you? Why they went from Discover to MasterCard?!?! I wonder what Apple will use for outside of the U.S.?

Dude, how is that even possible? What is being given up by consumers in exchange? Tons of personal data?

Would a persona be able to see The Last Jedi on opening night (2D movie only, no 3D)?

rob53

Why are we worried about whether the Discover card is used at any places of business. From what Apple says, "Apple customers in the US can use Apple Pay to send and receive money with friends and family quickly, easily and securely." This has nothing to do with buying anything anywhere, it's only for person-to-person money transfers. Use your existing debit card loaded in Apple Pay and it works for free. Use a credit card and it costs the typical 2-3%. "They can use the debit and credit cards they already have added to Apple Pay, so there’s no need to install an app or create yet another account."

Am I missing something? We don't have to get a Discover card, we just use our existing cards, although I'll need to add my debit card to Apple Pay. I don't understand why anyone is even talking about MoviePass.

nhughes

rob53 said:

Why are we worried about whether the Discover card is used at any places of business. From what Apple says, "Apple customers in the US can use Apple Pay to send and receive money with friends and family quickly, easily and securely." This has nothing to do with buying anything anywhere, it's only for person-to-person money transfers. Use your existing debit card loaded in Apple Pay and it works for free. Use a credit card and it costs the typical 2-3%. "They can use the debit and credit cards they already have added to Apple Pay, so there’s no need to install an app or create yet another account."

Am I missing something? We don't have to get a Discover card, we just use our existing cards, although I'll need to add my debit card to Apple Pay. I don't understand why anyone is even talking about MoviePass.

In addition to P2P transfers, you can also use Apple Pay Cash in stores. Whatever money is loaded on your virtual card is available to be spent, just like a debit card. So, if you wanted, you could load up your balance in Settings to add cash to your card for spending. Or accrue money transferred from friends and then, instead of transferring it to your bank account, spend it directly at the store.

The problem is, Discover is not as widely accepted as Visa, MasterCard and American Express. So there is a question as to whether a Discover debit card will be accepted at a business that accepts Apple Pay and NFC payments, but does not accept Discover. I don't know of any, but I am guessing some exist. As I speculated earlier, Discover debit, through its Pulse debit service, may be more widely accepted than Discover credit, which is known for higher fees.

steveau

When will it be available outside the US?

nhughes

steveau said:

When will it be available outside the US?

Apple has not given any indication, unfortunately. But if I had to harbor a guess, I would imagine the rollout will be similar to Apple Pay (which is to say not very quick).

http://appleinsider.com/articles/15/07/13/apple-pay-launches-in-uk-with-support-from-250k-stores-8-banks

rob53

nhughes said:

rob53 said:

Why are we worried about whether the Discover card is used at any places of business. From what Apple says, "Apple customers in the US can use Apple Pay to send and receive money with friends and family quickly, easily and securely." This has nothing to do with buying anything anywhere, it's only for person-to-person money transfers. Use your existing debit card loaded in Apple Pay and it works for free. Use a credit card and it costs the typical 2-3%. "They can use the debit and credit cards they already have added to Apple Pay, so there’s no need to install an app or create yet another account."

Am I missing something? We don't have to get a Discover card, we just use our existing cards, although I'll need to add my debit card to Apple Pay. I don't understand why anyone is even talking about MoviePass.

In addition to P2P transfers, you can also use Apple Pay Cash in stores. Whatever money is loaded on your virtual card is available to be spent, just like a debit card. So, if you wanted, you could load up your balance in Settings to add cash to your card for spending. Or accrue money transferred from friends and then, instead of transferring it to your bank account, spend it directly at the store.

The problem is, Discover is not as widely accepted as Visa, MasterCard and American Express. So there is a question as to whether a Discover debit card will be accepted at a business that accepts Apple Pay and NFC payments, but does not accept Discover. I don't know of any, but I am guessing some exist. As I speculated earlier, Discover debit, through its Pulse debit service, may be more widely accepted than Discover credit, which is known for higher fees.

Thanks for the additional information. As for Discover cards, Square takes them all so all the businesses using this POS system should have no problem taking Apple Pay Cash. There are plenty of these newer POS systems based on iPads that more than likely take all major credit and debit cards, and Discover is still included in that mix. I find Amex not being accepted more than Discover. I guess it all depends on how current the business' POS system is. I still see businesses that aren't taking chipped cards.

thisisasj

Discover card acceptance is wider than we realize. It's just Discover cardholders aren't as numerous as the other big three. I see about as many "we accept Apple Pay" stickers on merchant doors as ones that say they also accept Discover. The bigger challenge still is finding retailers accepting NFC payments at all.

technologist

nhughes said:

repressthis said:

nhughes said:

racoleman29 said:

Why not Visa or MC? Just curious.

Probably because Green Dot uses Discover. But, from a consumer perspective, the payment network means more, as it determines where a card can or cannot be used.

So, if a retailer does not except Discover, Apple Pay Cash will therefore not be accepted??

This is what I don't know the answer to, and am trying to find out.

As I said in the previous comment, the fact that Apple Pay Cash uses Discover debit (Pulse) suggests that it would be more widely accepted than Discover credit (which has limited reach vs. its competitors). Pulse debit is pretty widely accepted.

If anyone knows of any retailers that accept Apple Pay/NFC but *do not* accept Discover card, then we can find out if it's a problem. But I'm guessing the number of companies that fall in that Venn diagram overlap is pretty low.

Please note as the article say, Apple is using Discover payment channel, part but separate from Discover card. I know because it is the same channel SAP Ariba uses for its Ariba Pay solution. It is a transaction between users; and then between users AppleCash account and their bank accounts. So nothing to do with retailers accepting Discover cards or not.

gunner1954

repressthis said:

nhughes said:

racoleman29 said:

Why not Visa or MC? Just curious.

Probably because Green Dot uses Discover. But, from a consumer perspective, the payment network means more, as it determines where a card can or cannot be used.

So, if a retailer does not except Discover, Apple Pay Cash will therefore not be accepted??

Not necessarily. The transaction is Apple Pay to Apple Pay using verified Apple ID's via Messages, through the Discover (Pulse) network with transactions verified by Green Dot Bank. Apple Pay Cash is intended for person to person transactions, not payment to retailers whom would use an Apple Pay compatible terminal.