imagine the manpower involved in negotiating with every retail company in America...and eventually the world
I don't think they have to because this won't be an Apple-controlled payment system. Apple only needs to negotiate with key financial institutions to get them to offer lower rates for charges due to the extra security of their Touch-ID enabled devices and then convince a few key retailers how the cost of these NFC nodes will be nothing compared to the extra money they'll save with lower fees. After that the rest should fall into place, including other devices that utilize NFC, and it's possible that retailers won't be getting a discount for those devices if the financial institutions don't see their setup as being as secure as Apple's secure enclave solution.
imagine the manpower involved in negotiating with every retail company in America...and eventually the world
Originally Posted by SolipsismX
I don't think they have to because this won't be an Apple-controlled payment system.
Or, think of it this way. Do Visa/MasterCard/American Express negotiate with every tiny retailer everywhere? No, the retailer just buys one of those swipey things that supports the brands.
Similarly, Apple won’t need to go to anyone. Retailers will come to THEM.
Or, think of it this way. Do Visa/MasterCard/American Express negotiate with every tiny retailer everywhere? No, the retailer just buys one of those swipey things that supports the brands.
Similarly, Apple won’t need to go to anyone. Retailers will come to THEM.
actually the retailers negotiate with a middleman (Payment card Processor). They are the ones that wire up that final mile between the the retailers and the credit card cos (who then deal with the issuing banks).
And yes, I think Apple will 'negotiate' with retailers (in typical apple fashion... here's our stock deal, take it or pound sand... I'm looking at you, VERIZON).
But, like apple deals with every appleID user, and every registered developer, Apple understands internet scale. To set up a 'break even service
but, following the money.... It's the PCP's that are the weakest link in the chain. They are nameless faceless 'costs' to everyone... effectively, just a 'value added network provider' to retailers, who evolved pre-internet (dial-up modems). Ripe for picking.
| ^ | | | (franchising Fees | cut of the transaction fee) | | | V | Visa/MC/Amex (wants everyone to use a card for everything) | ^ | | | (handling and branding fees) | | | Your Bank i.e.Credit Card Issuer (wants you to have debt) | ^ | | | (late fees, interest) | | +---------------- 'you' (wants something)
Each layer generates revenue and profit
I truly think that's Apple's next move is to disintermediate the PCPS.
- The control a low risk high consuming marketshare's 'point of purchase' swings to apple... the ugly high risk stuff (high cost, low profit) stays with PCPs [Think health insurance as a parallel. Credit cards are like health insurance... 'healthy' people 'subsidize' the 'non-healthy people's premiums... take them out of the pool, then the costs go up and/or the profits go down]
All apple has to do is drop the transaction cost to the retailer by say .5-1%... and retailers will move in droves to their PCP.
- It's easy for big retailers stores to add a different Payment Card Processors into their system
- It's easy for small retailers with internet to set up a cheap iPad as PoS for 'iCard' purchases into a different Payment Card Processor.
(it's a website.... get an AppleID, enter your banking information, setup up your iPads, and go)
*highly reliable internet is the big question mark here*
- It's easy for any internet eComm site to write a call to apple's internet services.
- Banks like the lower risk and built in fraud protection for their high value customers (high risk of loss)
- Visa Still gets their money, and more transactions may occur (less friction)
- Retailers spend less time transacting because apple perfects NFC, pays less per customer due to lower risk
- Consumers like the convenience.
The Obvious candidate for obviating in round 1 is the payment card processor.. and along the way... Smart and Paypal. Amazon... This is a turf war with them, I see them as being the obvious long game player in . Google - won't play wall in the brick and mortar world with their 90% solution mentality. World Wide, Look for a chinese and Dubai/Oil-Arab player as well.
actually the retailers negotiate with a middleman (Payment card Processor). They are the ones that wire up that final mile between the the retailers and the credit card cos (who then deal with the issuing banks).
Oh, right, right; I’d forgotten about those.
...here’s our stock deal, take it or pound sand...
????
All apple has to do is drop the transaction cost to the retailer by say .5-1%... and retailers will move in droves to their PCP.
The best part (terrifying, if you’re a traditional purchase system) is that they can do it, because they don’t have to rely on this service for income of any sort!
Comments
An analyst is responsible for the love of humanity?
News to me.
I don't think they have to because this won't be an Apple-controlled payment system. Apple only needs to negotiate with key financial institutions to get them to offer lower rates for charges due to the extra security of their Touch-ID enabled devices and then convince a few key retailers how the cost of these NFC nodes will be nothing compared to the extra money they'll save with lower fees. After that the rest should fall into place, including other devices that utilize NFC, and it's possible that retailers won't be getting a discount for those devices if the financial institutions don't see their setup as being as secure as Apple's secure enclave solution.
Or, think of it this way. Do Visa/MasterCard/American Express negotiate with every tiny retailer everywhere? No, the retailer just buys one of those swipey things that supports the brands.
Similarly, Apple won’t need to go to anyone. Retailers will come to THEM.
Or, think of it this way. Do Visa/MasterCard/American Express negotiate with every tiny retailer everywhere? No, the retailer just buys one of those swipey things that supports the brands.
Similarly, Apple won’t need to go to anyone. Retailers will come to THEM.
actually the retailers negotiate with a middleman (Payment card Processor). They are the ones that wire up that final mile between the the retailers and the credit card cos (who then deal with the issuing banks).
And yes, I think Apple will 'negotiate' with retailers (in typical apple fashion... here's our stock deal, take it or pound sand... I'm looking at you, VERIZON).
But, like apple deals with every appleID user, and every registered developer, Apple understands internet scale. To set up a 'break even service
but, following the money.... It's the PCP's that are the weakest link in the chain. They are nameless faceless 'costs' to everyone... effectively, just a 'value added network provider' to retailers, who evolved pre-internet (dial-up modems). Ripe for picking.
Each layer generates revenue and profit
I truly think that's Apple's next move is to disintermediate the PCPS.
- The control a low risk high consuming marketshare's 'point of purchase' swings to apple... the ugly high risk stuff (high cost, low profit) stays with PCPs [Think health insurance as a parallel. Credit cards are like health insurance... 'healthy' people 'subsidize' the 'non-healthy people's premiums... take them out of the pool, then the costs go up and/or the profits go down]
All apple has to do is drop the transaction cost to the retailer by say .5-1%... and retailers will move in droves to their PCP.
- It's easy for big retailers stores to add a different Payment Card Processors into their system
- It's easy for small retailers with internet to set up a cheap iPad as PoS for 'iCard' purchases into a different Payment Card Processor.
(it's a website.... get an AppleID, enter your banking information, setup up your iPads, and go)
*highly reliable internet is the big question mark here*
- It's easy for any internet eComm site to write a call to apple's internet services.
- Banks like the lower risk and built in fraud protection for their high value customers (high risk of loss)
- Visa Still gets their money, and more transactions may occur (less friction)
- Retailers spend less time transacting because apple perfects NFC, pays less per customer due to lower risk
- Consumers like the convenience.
The Obvious candidate for obviating in round 1 is the payment card processor.. and along the way... Smart and Paypal. Amazon... This is a turf war with them, I see them as being the obvious long game player in . Google - won't play wall in the brick and mortar world with their 90% solution mentality. World Wide, Look for a chinese and Dubai/Oil-Arab player as well.
Oh, right, right; I’d forgotten about those.
????
The best part (terrifying, if you’re a traditional purchase system) is that they can do it, because they don’t have to rely on this service for income of any sort!