Apple reportedly inks deal with American Express for 'iPhone 6' payment system

Posted:
in iPhone edited October 2014
Credit card giant American Express is apparently onboard with Apple's forthcoming mobile payment system, expected to be a part of the company's next-generation iPhone set to be unveiled at a Sept. 9 media event.

Touch ID


Word of the Buffalo, New York, financial giant's apparent partnership with Apple was first reported on Sunday by Re/code, which reaffirmed that the payment system is expected to be tied to the forthcoming "iPhone 6." The so-called e-wallet system would allow users to use their handset to make payments at retail outfits, negating the need for a physical credit card.

Sunday's report said that AmEx is "one of several partners" that the company will need to sign up, but didn't indicate who else might be onboard. Also unknown is which retailers might support Apple's system, which is expected to rely on a secure enclave inside the "iPhone 6."

Another expected key component is a near-field communications chip, rumored to appear for the first time ever in Apple's 2014 iPhone models. The new handset is rumored to come in screen sizes of 4.7 and 5.5 inches, and recent hardware leaks have supported expectations that an NXP-made NFC chip will be a part of the phone.

Apple has also filed for patents that describe mobile payment systems utilizing NFC RFID technology. But to date, the company has relied on Bluetooth and Wi-Fi for short-range wireless functions, most notably with the company's proprietary combination of the two, dubbed iBeacon.

Rumors of NFC functionality in a future iPhone have persisted for years, and seem to appear leading up to just about every new handset launch. And though there have been a multitude of NFC-capable smartphones on the market for years, has never been an Apple product with NFC functionality.

One rumor that surfaced this summer claimed that Apple was accelerating work on a mobile payments system that could be ready by this fall, launching as part of the "iPhone 6." That report claimed that Apple was in talks with partner companies, including Visa, in an effort to debut its own e-wallet platform.
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Comments

  • Reply 1 of 100
    I heard from good sources, that Mastercard is on board as well. Mr. Gary Flood, MasterCard's President of Global Products and Solutions, as well as Ed Maclaughlin, will both probably be attending the event.
  • Reply 2 of 100
    nos2unos2u Posts: 12member
    Now if only the the State and local governments would accept a scanned copy of my drivers license- I would no longer need my wallet.
  • Reply 3 of 100

    Breaking: the 5.5 inch iPhone will reportedly have a bigger and better NFC chip, topped with gold, sapphire, frankincense and myrrh.

  • Reply 4 of 100
    I doubt they'd only be linked with Amex. They'd have to have Visa as well in tow for sure. Plus MC.

    The problem is unless they're 'AirDropping' these NFC receptacles at all these businesses on launch day then how prolific will this payments rollout be? I know in my normal day-to-day with all the restaurants/shops/etc. I go to I don't see them.
  • Reply 5 of 100
    I doubt they'd only be linked with Amex. They'd have to have Visa as well in tow for sure. Plus MC.

    MasterCard's got a deal with Apple as well! Don't know about Visa though, but maybe...
  • Reply 6 of 100
    sockrolidsockrolid Posts: 2,789member

    "Never leave home without it."

  • Reply 7 of 100
    apple ][apple ][ Posts: 9,233member

    Wait for the Fandroid trolls to say after the iPhone 6 launch that Apple didn't invent NFC and that NFC has been found on some Android phones for years now.

     

    How come NFC hasn't taken off yet, with all of the billions of Android activations? You'd figure that it would be all over the place by now.

     

    Oh, that's right. Android users are totally insignificant, no matter what their reported numbers might be. 

     

    As usual, it will take Apple to come along and get it right. Apple and Apple users will make this a standard. 

     

    Where Android fails, Apple succeeds.

     

    If you owned a store, would you be willing to install something that was only used by Android users? A group of people that is statistically known for being cheap? That sounds like bad business. But when Apple rolls out their new payment system, then just watch how most of the big retailers will be getting on board with this.

  • Reply 8 of 100

    I hope it's happening, I really do. The US credit card infrastructure has relied on mag stripe readers for too long, and card skimmers are rampant at unattended readers like gas pumps. Smartchip credit cards is something the US credit card industry could have moved to years ago (like Europe), but alas, they waited, and along comes Apple taking its sweet time… Hopefully it will offer a more secure payment option, if not also more convenient.

    But I agree that someone like Square needs to offer low-cost chip readers so small business to make this change happen.

  • Reply 9 of 100
    Quote:

    Originally Posted by Apple ][ View Post

     

    If you owned a store, would you be willing to install something that was only used by Android users? A group of people that is statistically known for being cheap? That sounds like bad business. But when Apple rolls out their new payment system, then just watch how most of the big retailers will be getting on board with this.


     

    The cheap part wouldn't matter to me as much as the malware threat.

  • Reply 10 of 100
    macinthe408macinthe408 Posts: 1,050member

    My theory: Apple builds a BT LE/NFC fob that's given away for free to all retailers that want to be an "iTunes Pay" partner, ala the Square Reader. 

     

    "Create a free iTunes Retailer account, connect it to your merchant account, and start accepting payments from customers using the new iPhone Pro with Touch ID. No swipes, no hassle, no credit card processing fees. Like iTunes, we batch-process all credit card transactions, so that you're left fee-free!" 

     

    Plausible? 

  • Reply 11 of 100
    Excellent news, as Amex is truly a terrific organization.

    The only slight problem could be that Amex has much lower acceptance by establishments in Asia and Europe, as well as with smaller retailers in the US (given their higher merchant rates compared to MasterCard and Visa).

    That said, I have no doubt that the others will be signing on pretty soon if Amex is on board.
  • Reply 12 of 100
    apple ][apple ][ Posts: 9,233member
    Quote:

    Originally Posted by island hermit View Post

     

     

    The cheap part wouldn't matter to me as much as the malware threat.


     

    True, good point!

     

    To be honest, I don't see how anybody who has more than $10 in their bank account would ever risk using any kind of Android phone.

  • Reply 13 of 100
    My theory: Apple builds a BT LE/NFC fob that's given away for free to all retailers that want to be an "iTunes Pay" partner, ala the Square Reader. 

    "Create a free iTunes Retailer account, connect it to your merchant account, and start accepting payments from customers using the new iPhone Pro with Touch ID. No swipes, no hassle, no credit card processing fees. Like iTunes, we batch-process all credit card transactions, so that you're left fee-free!" 

    Plausible? 
    Definitely not plausible. No credit card fees? How will CC companies make money? Even with Square you pay 2.75%.

    I think part of your theory will work, but there will most definitely be fees.
  • Reply 14 of 100
    macinthe408macinthe408 Posts: 1,050member
    [QUOTE]Definitely not plausible. No credit card fees? How will CC companies make money? Even with Square you pay 2.75%.

    I think part of your theory will work, but there will most definitely be fees.[/QUOTE]

    What if Apple covers the fees, like they do when one buys content from the iTunes Store?

    As you state, CC companies will want their cut, but I'm sure Apple can sweeten the pot, while also throwing in some fraud-prevention bullet points in their presentation to the card companies. I think the chip-and-PIN movement is finally starting to take hold in the US, and this (Touch ID) might be a good way to move the needle even further.

    [In related future news: California Institutes Mandatory 50-year Jail Sentence for Criminals Who Peddle Black Market Thumbs Used in Touch ID Scams.]
  • Reply 15 of 100
    macbook promacbook pro Posts: 1,605member
    How will Apple revolutionize contactless payments? I believe there may be three outstanding issues that Apple may be able to resolve.

    One of the greatest failings is the requirement to have the credit card or device in hand.

    Ubiquity of payment terminals may be another concern.

    Security is an area of concern for many. I believe competitors will attempt to persuade the public to believe the Apple solution is not secure.
  • Reply 16 of 100
    SpamSandwichSpamSandwich Posts: 33,408member
    Quote:
    Originally Posted by anantksundaram View Post



    Excellent news, as Amex is truly a terrific organization.



    The only slight problem could be that Amex has much lower acceptance by establishments in Asia and Europe, as well as with smaller retailers in the US (given their higher merchant rates compared to MasterCard and Visa).



    That said, I have no doubt that the others will be signing on pretty soon if Amex is on board.

     

    Hmm... Maybe I'll load up on more AXP on Tuesday. It's done very well for me so far.

  • Reply 17 of 100
    SpamSandwichSpamSandwich Posts: 33,408member
    Quote:
    Originally Posted by guiguihip View Post





    MasterCard's got a deal with Apple as well! Don't know about Visa though, but maybe...

     

    According to The Information, Apple has a deal with Visa as well.

     

    https://www.theinformation.com/Apple-Mobile-Wallet-Talks-Heat-Up

  • Reply 18 of 100
    SpamSandwichSpamSandwich Posts: 33,408member
    Quote:

    Originally Posted by MacBook Pro View Post



    How will Apple revolutionize contactless payments? I believe there may be three outstanding issues that Apple may be able to resolve.



    One of the greatest failings is the requirement to have the credit card or device in hand.



    Ubiquity of payment terminals may be another concern.



    Security is an area of concern for many. I believe competitors will attempt to persuade the public to believe the Apple solution is not secure.

     

    Apple's security on the newer phones is some of the most sophisticated available. Their fingerprint/thumb print scanner is virtually unbeatable.

  • Reply 19 of 100
    mpantonempantone Posts: 1,585member
    Quote:
    Originally Posted by macinthe408 View Post



    What if Apple covers the fees, like they do when one buys content from the iTunes Store?

    What are you talking about? The credit card merchant transaction fees are part of Apple's cost of doing business, the same with almost every other business that accepts credit cards. Same with employee salaries, the electricity to power the lights, rent, the toilet paper in the guest bathroom, whatever. Those costs are passed onto the customer.

     

    As far as I know, only a handful of businesses (e.g., some gas stations) have a separate up charge for consumers who pay by credit cards. If you buy a dozen eggs at the grocery store, it doesn't matter if you pay by credit card, personal check or cash, the price is the same.

     

    If a merchant doesn't like the credit card fees, they can elect not to accept credit cards. A lot of dive bars in San Francisco are cash only. Most vendors at farmers markets are also cash only. Most auto dealerships will not let you buy a vehicle with a consumer charge card. The Internal Revenue Service does not accept credit cards. Et cetera ad nauseam.

     

    Note that you can essentially pay cash at the iTunes Store, just buy an iTunes Card at the local grocery store and pay cash. Even better, buy a discounted iTunes Card (sometimes they can be found at 25-30% off) and use that to add funds to your account. That's actually the smart way of funding iTunes/App Store purchases since it's free money.

  • Reply 20 of 100
    SpamSandwichSpamSandwich Posts: 33,408member
    Quote:
    Originally Posted by Soundvision View Post





    Definitely not plausible. No credit card fees? How will CC companies make money? Even with Square you pay 2.75%.



    I think part of your theory will work, but there will most definitely be fees.

     

    All Apple has to do is siphon off the credit card companies business and eventually offer their own Apple-branded credit card on the iPhone. Cut out the middlemen and you'll instantly have the worlds biggest credit company. American Express has a market cap of less than $94 billion.

     

    Five years from now...

     

    Tim:  "Since the Federal Reserve is in the process of being shut down, we've been selected by the US government to administer and manage the US currency system. We are replacing the dollar with our secure and stable commodity-backed iCoin. Only available on iPhone and iOS, as mandated by government decree. Hail Satan!... er, oops..."

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