Originally Posted by SpamSandwich
If Apple is facilitating the "float" then they would be taking on the risk of acting as middleman, but they'd also be disintermediating the banks and eventually the credit card companies themselves, after consumers realize they don't need a credit card at all.
Apple isn't doing that. (yet*)
Apple will merely charge the credit card issuers passed on to the retailers who really pay for everything, that the phone in front of them is owned by the person who is holding it, and that the card information in that phone (more like the token sent by MC/Visa/AMEX) has not been tampered with.
That reduces card fraud immensely.
If your fraud loss as a Merchant is 1% and you're a million dollar a year store ($5,000 a day and $50 in CC fraud a day, of which your liable for all of it... read the fine print), that's $10,000. If an iPhone transaction fraud risk is .01% ($100 a year ), would you pay .25% ($2500) to and net $7400 if all your buyers used that form of payment?
Say Apple gets that .2% of that transaction... Times eleventyBillion transactions on average of $50 (simple numbers) $550B*.2% = 1.25Billion.
All that for the price of setting up an AppleID.
*(The Long game is Apple using your AppleID's CC on file as your 'bank', and eventually supplanting any intermediate Credit Card Processor, and dealing directly with the band card networks.
Then Apple Issues it's own Credit Card, that is not network affiliated, but works wherever your iPhone can purchase stuff. With all the money overseas, it can meet the banking laws in most countries, and/or buy a bank in each...
Apple is getting all the processing fees, has lower fraud, and is getting interest on the float.... House money)
Money for nothing and your Chicks for Free.