'Positive' talks underway for Apple Pay partnership with Alibaba's Alipay in China

Posted:
in iPhone edited November 2014
After officials from both Apple and Alibaba publicly expressed interest in forging a possible mobile payment deal, Alibaba confirmed on Tuesday that it is currently in negotiations to bring Apple Pay to China.



A potential deal between Apple Pay and Alibaba's Alipay would focus exclusively on the Chinese market, where Alibaba is the dominant online retailer, vice chairman Joseph Tsai told The Wall Street Journal. He said that while the company is "positive" about the ongoing talks, details must still be worked out before an agreement can be reached.

While Alibaba is an online powerhouse, the company's Alipay has yet to take off in a meaningful way at retail in China. The system uses QR codes to be scanned, allowing users to complete transactions on their smartphone.

A partnership with Apple Pay could help both companies gain foothold in the market, as Apple has yet to debut its mobile payments service outside of the U.S.

Tsai suggested that an Apple Pay-Alipay deal could use Alibaba to provide back-end services for Apple Pay, and users would pay for transactions with money from their Alipay accounts.

Both Alibaba Chairman Jack Ma and Apple Chief Executive Tim Cook have expressed interest in working together. Tuesday's remarks reveal that those talks have progressed, and that both parties are still hopeful a deal can be reached.

A potential tie-up between Apple and Alibaba could face significant scrutiny from the Chinese government, however. Alipay has already seen its share of road blocks as it attempts to muscle its way into the mobile payment space.

The Chinese mobile payment market is currently dominated by UnionPay, a state-run operation that has NFC payment terminals across the country. Apple Pay in the iPhone 6 and iPhone 6 Plus is based on the same wireless technology, but adds Touch ID fingerprint sensing for added security.
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Comments

  • Reply 1 of 26
    rob53rob53 Posts: 2,105member

    Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.

  • Reply 2 of 26
    rob53 wrote: »
    Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking banking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.
  • Reply 3 of 26
    rob53 wrote: »
    Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.

    I agree, in addition the method at checkout with MCX system is slow, clunky and not as safe. Too futzy! One might as well write a check if you're gonna stand their that long.

    The train is already leaving the station and MCX is still deciding what to pack...
  • Reply 4 of 26
    rob53rob53 Posts: 2,105member
    Quote:
    Originally Posted by Dick Applebaum View Post



     



    Perfect edit!!

     

  • Reply 5 of 26
    paxmanpaxman Posts: 4,616member
    Quote:

    Originally Posted by rob53 View Post

     

    Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.


    I think a system that takes money directly out of ones checking account is a great solution for a lot of people, specially people with limited funds (low pay families / students) and for whom debt is a real problem. But as I understand it Apple Pay will also work with debit cards which essentially does the same. 

     

    For me the problem is if MCX enforces a one solution system whereby ApplePay is contractually excluded although even if this happens it will be a short term issue so I am not worried.

     

    But the point is that it doesn't have to be ApplePay or bust. There is room for more than one system and if ApplePay is the best it will lead (and help Apple sell more devices). For non iPhone folks ApplePay is of little use.

  • Reply 6 of 26
    paxman wrote: »
    rob53 wrote: »
     
    Like I've said before, ApplePay will be accepted worldwide once all the arrangements are made, making certain American companies look really foolish. The MCX consortium is barking up the wrong tree and will ultimately fail. Whether people pay off their credit cards every month or not, they use it as a way to manage their money. Having a payment system that immediately takes money from your checking account is the same as using cash and doesn't fit many people's financial planning needs. I know MCX says they will/might allow credit cards to be used but the damage has already been done. MCX doesn't work for consumers.
    <span style="line-height:1.4em;">I think a system that takes money directly out of ones checking account is a great solution for a lot of people, specially people with limited funds (low pay families / students) and for whom debt is a real problem. But as I understand it Apple Pay will also work with debit cards which essentially does the same. </span>


    For me the problem is if MCX enforces a one solution system whereby ApplePay is contractually excluded although even if this happens it will be a short term issue so I am not worried.

    But the point is that it doesn't have to be ApplePay or bust. There is room for more than one system and if ApplePay is the best it will lead (and help Apple sell more devices). For non iPhone folks ApplePay is of little use.


    There is one very, very huge difference between how MCX and ApplePay handle debit cards.

    MCX:  The merchant, and any hacker, has direct access to your bank, DL and Health info -- and can process as many transactions as it desires.

    ApplePay:  The debit card is processed in the same way as a credit card -- a one time token for the transaction -- no one but the bank sees your cc info (or transaction info) ... DL and Health info are not used ... a dishonest merchant or a hacker gets nothing that he can use to create another valid transaction.

    In the US, I believe you automatically get a debit card when you open a bank checking account -- if so, there would be no burden on people with limited funds -- and, as a bonus you get convenience, privacy and security -- free!
  • Reply 7 of 26
    I don't know why this article says "Alipay has yet to take off in a meaningful way"
    a lot of my chinese friends use Alipay to do everything
    online shopping of course, also pay utility bills, pay taxi and metro, etc
  • Reply 8 of 26
    rob53rob53 Posts: 2,105member
    Quote:



    Originally Posted by paxman View Post

     

    I think a system that takes money directly out of ones checking account is a great solution for a lot of people, specially people with limited funds (low pay families / students) and for whom debt is a real problem. But as I understand it Apple Pay will also work with debit cards which essentially does the same. 

     

    For me the problem is if MCX enforces a one solution system whereby ApplePay is contractually excluded although even if this happens it will be a short term issue so I am not worried.

     

    But the point is that it doesn't have to be ApplePay or bust. There is room for more than one system and if ApplePay is the best it will lead (and help Apple sell more devices). For non iPhone folks ApplePay is of little use.


    I was using credit cards and debit cards as being the same thing. They use a system where the consumer doesn't have to provide direct banking information (checking account number, routing number, etc.) to the retailer. The retailer only gets what's available on the card. MCX is going much further than this while ApplePay is giving the retailer a single-use token. 

     

    I'm fine with competition as long as it's secure, easy to use and makes sense. Those using Android or Windows mobile devices can come up with their own secure method of payment, hopefully NFC-based so businesses will install these terminals. The MCX solution is so last century scanning a barcode for payment information. QR codes are fine for finding information (I don't see every product including an NFC-aware device for checkout, at least not for many years--how do you put one on vegetables??) but I can't see them as being secure for financial transactions.

  • Reply 9 of 26
    Here is how I think this is going to shake out -- for AliPay in China and in the US (or anywhere) where the consumer has limited funds ...

    Apple's iPhone 6 is $199 under contract, or $649 unlocked. This is expensive for people with limited funds. But it is to the advantage of the consumer, the merchant and the bank (credit card and debit card issuer) to have convenient, private and secure transactions. CC (and debit card) fraud has costs to each party involved -- and as the hackers get get better, the costs get higher.

    There is a tipping point where it makes sense to provide the consumer with ApplePay (an iPhone 6) to eliminate investigation, processing, refund, insurance costs of CC (and debit card) fraud -- not to mention inconvenience.

    Say, the issuing bank sets up an allocation of a $200 instant cashback bonus for your first $200 charged with an ApplePay credit or debit card ... and, say, that you can use that very same cashback bonus to purchase the iPhone 6 (so you can pay with your ApplePay credit or debit card ).

    Every one wins!
  • Reply 10 of 26
    rob53rob53 Posts: 2,105member
    Quote:

    Originally Posted by Dick Applebaum View Post



    MCX:  The merchant, and any hacker, has direct access to your bank, DL and Health info -- and can process as many transactions as it desires.

    I remember a big push for securing PII (personally identifiable information). We had to go through all our work computers and delete SSNs and all information about ourselves and others to comply with federal law. If we were required to have them, e.g., HR and financial departments, these computers had to have their disks encrypted. Why are systems that ignore these laws being allowed to be developed? MCX can say their systems are secure but the fact they are requiring access to PII without any justifiable and legal reason means they are probably breaking the law. (Another issue: Why is the NSA blatantly ignoring PII demanding they have full access to everything?)

     

    https://en.wikipedia.org/wiki/Personally_identifiable_information

  • Reply 11 of 26
    Here is how I think this is going to shake out -- for AliPay in China and in the US (or anywhere) where the consumer has limited funds ...

    Apple's iPhone 6 is $199 under contract, or $649 unlocked. This is expensive for people with limited funds. But it is to the advantage of the consumer, the merchant and the bank (credit card and debit card issuer) to have convenient, private and secure transactions. CC (and debit card) fraud has costs to each party involved -- and as the hackers get get better, the costs get higher.

    There is a tipping point where it makes sense to provide the consumer with ApplePay (an iPhone 6) to eliminate investigation, processing, refund, insurance costs of CC (and debit card) fraud -- not to mention inconvenience.

    Say, the issuing bank sets up an allocation of a $200 instant cashback bonus for your first $200 charged with an ApplePay credit or debit card ... and, say, that you can use that very same cashback bonus to purchase the iPhone 6 (so you can pay with your ApplePay credit or debit card ).

    Every one wins!

    Next year, the 6 will be $99/$549, and then $0/$449, it's going to spread adoption even more.
  • Reply 12 of 26
    rob53 wrote: »
    [CONTENTEMBED=/t/183358/positive-talks-underway-for-apple-pay-partnership-with-alibabas-alipay-in-china#post_2637904 layout=inline]<span style="line-height:1.4em;">Quote:</span>
    [/CONTENTEMBED]
    paxman wrote: »
     
    <span style="line-height:1.4em;">I think a system that takes money directly out of ones checking account is a great solution for a lot of people, specially people with limited funds (low pay families / students) and for whom debt is a real problem. But as I understand it Apple Pay will also work with debit cards which essentially does the same. </span>


    For me the problem is if MCX enforces a one solution system whereby ApplePay is contractually excluded although even if this happens it will be a short term issue so I am not worried.

    But the point is that it doesn't have to be ApplePay or bust. There is room for more than one system and if ApplePay is the best it will lead (and help Apple sell more devices). For non iPhone folks ApplePay is of little use.
    I was using credit cards and debit cards as being the same thing. They use a system where the consumer doesn't have to provide direct banking information (checking account number, routing number, etc.) to the retailer. The retailer only gets what's available on the card. MCX is going much further than this while ApplePay is giving the retailer a single-use token. 

    I'm fine with competition as long as it's secure, easy to use and makes sense. Those using Android or Windows mobile devices can come up with their own secure method of payment, hopefully NFC-based so businesses will install these terminals. The MCX solution is so last century scanning a barcode for payment information. QR codes are fine for finding information (I don't see every product including an NFC-aware device for checkout, at least not for many years--how do you put one on vegetables??) but I can't see them as being secure for financial transactions.

    Ahh ... but, today, every boutique, restaurant, coffee shop, farmers market stall, flea market stall, Mom & Pop whatever -- can accept credit and debit cards on an iPad mini with a free card reader. It's not too much of a jump to think of iPads with NFC [enabled] to be used as NFC POST Terminals.

    I wonder if Churchill Downs or Santa Anita will be the first to accept Apple Pay at their betting windows ...

    Edit: Or the first church with an Apple Pray Terminal in the collection basket.
     
  • Reply 13 of 26
    paxmanpaxman Posts: 4,616member
    Quote:

    Originally Posted by rob53 View Post

     

    I was using credit cards and debit cards as being the same thing. They use a system where the consumer doesn't have to provide direct banking information (checking account number, routing number, etc.) to the retailer. The retailer only gets what's available on the card. MCX is going much further than this while ApplePay is giving the retailer a single-use token. 

     

    I'm fine with competition as long as it's secure, easy to use and makes sense. Those using Android or Windows mobile devices can come up with their own secure method of payment, hopefully NFC-based so businesses will install these terminals. The MCX solution is so last century scanning a barcode for payment information. QR codes are fine for finding information (I don't see every product including an NFC-aware device for checkout, at least not for many years--how do you put one on vegetables??) but I can't see them as being secure for financial transactions.




    to you and @Mr Applebaum - Exactly. I think we are all on the same page. As far as MCX, I am not worried and my only point is I am fine with its existence. I have to admit, as a merchant I get kinda excited about a system which bypasses the Credit Card companies. There is a company called Dwolla that offers a payment service similar to MCX in the sense that you need to give them access to your bank account. I am not at all sure how secure or not this is but it makes for very much reduced cost transactions. In Canada there is a system called Interac which allows you to pay directly from your online banking to any person or merchant and the only thing that is required is the recipient's email address. It is a great system for certain kinds of transactions though it is not practical for regular high volume online or retail transactions. As a merchant such a transaction costs next to nothing compared to a fairly hefty 2 - 3% or more for AmEx (which as a merchant I refuse to touch)

  • Reply 14 of 26
    rob53rob53 Posts: 2,105member
    Quote:

    Originally Posted by Dick Applebaum View Post



    Here is how I think this is going to shake out -- for AliPay in China and in the US (or anywhere) where the consumer has limited funds ...



    Apple's iPhone 6 is $199 under contract, or $649 unlocked. This is expensive for people with limited funds. But it is to the advantage of the consumer, the merchant and the bank (credit card and debit card issuer) to have convenient, private and secure transactions. CC (and debit card) fraud has costs to each party involved -- and as the hackers get get better, the costs get higher.



    There is a tipping point where it makes sense to provide the consumer with ApplePay (an iPhone 6) to eliminate investigation, processing, refund, insurance costs of CC (and debit card) fraud -- not to mention inconvenience.



    Say, the issuing bank sets up an allocation of a $200 instant cashback bonus for your first $200 charged with an ApplePay credit or debit card ... and, say, that you can use that very same cashback bonus to purchase the iPhone 6 (so you can pay with your ApplePay credit or debit card ).



    Every one wins!

    These numbers support your suggestion, http://www.cardhub.com/edu/credit-debit-card-fraud-statistics/

     

    ---

    Despite the fact that fraud only impacts a fraction of one percent of all purchases made with plastic, according to data from the Federal Reserve, it represents one of the biggest concerns among consumers. 

     


    • Credit card and debit card fraud resulted in losses amounting to $11.27 billion during 2012. Card issuers and merchants incurred 63% and 37% of those losses, respectively, with the following transactional breakdown:

      • Card issuer losses occur mainly at the point of sale from counterfeit cards while merchant losses occur mainly on card-not- present (CNP) transactions on the Web, at a call center or through mail order.


    If ApplePay, and other truly secure payment systems, could make a very significant dent in this cost and since the cost of card fraud doesn't actually cost that much to the card company, then why couldn't the card companies/supporting banks make an even higher contribution to the cost of an iPhone to a point where the iPhone is paid for. This would mean a reduction in cellular company contract support allowing them to reduce their charges (latter part will never happen). Apple doesn't have to lose any money, consumer concerns about fraud are reduced, and everybody is happy! Well, maybe sometime this could work but some financial people will say it won't and MCX members will still want their advertising PII.

  • Reply 15 of 26
    rob53rob53 Posts: 2,105member
    Quote:
    Originally Posted by paxman View Post

     



    to you and @Mr Applebaum - Exactly. I think we are all on the same page. As far as MCX, I am not worried and my only point is I am fine with its existence. I have to admit, as a merchant I get kinda excited about a system which bypasses the Credit Card companies. There is a company called Dwolla that offers a payment service similar to MCX in the sense that you need to give them access to your bank account. I am not at all sure how secure or not this is but it makes for very much reduced cost transactions. In Canada there is a system called Interac which allows you to pay directly from your online banking to any person or merchant and the only thing that is required is the recipient's email address. It is a great system for certain kinds of transactions though it is not practical for regular high volume online or retail transactions. As a merchant such a transaction costs next to nothing compared to a fairly hefty 2 - 3% or more for AmEx (which as a merchant I refuse to touch)


    Wells Fargo lets me transfer money fairly easily to someone else and while I like the possibility of doing things like this it also scares me that they would accept a transfer based on an email address. 

     

    As far as bypassing credit card companies, that's fine for retailers but I'll be damned if I'm going to give everyone my banking account information. I give it to a select few utility companies for autopayment but I'd rather give them a credit card because this third-party company protects me from the retailer and hacker getting to my money. As for AMEX, I use them a lot because they have taken care of me when my card number was stolen and used to create a fake card. This card was used multiple times in Canada. AMEX contacted me because they suspected fraudulent charges and put a hold on my account. The retailer took it and didn't care. If this had been MCX, my back account would have been emptied before I could have done anything about it. I'm sorry that AMEX costs you but I'm sure you just pass it on to your customers. It's a cost of doing business and I'm sure you can write it off as an expense. I also believe people with AMEX cards tend to spend more money so not accepting it actually costs you money in lost sales. 

     

    edited: Just saw this video article, didn't bother to watch it but it asks the question I answered (at least my opinion). It's not just ApplePay, it's credit card use in general. 


    • "Will Apple Pay make you spend more? We take a look at the three questions that matter most about Apple Pay: Is it easy to use? Is it safe? Will it change people's behavior?" [Video Report] CNNMoney 10:06 AM

  • Reply 16 of 26
    rob53 wrote: »
    Here is how I think this is going to shake out -- for AliPay in China and in the US (or anywhere) where the consumer has limited funds ...


    Apple's iPhone 6 is $199 under contract, or $649 unlocked. This is expensive for people with limited funds. But it is to the advantage of the consumer, the merchant and the bank (credit card and debit card issuer) to have convenient, private and secure transactions. CC (and debit card) fraud has costs to each party involved -- and as the hackers get get better, the costs get higher.


    There is a tipping point where it makes sense to provide the consumer with ApplePay (an iPhone 6) to eliminate investigation, processing, refund, insurance costs of CC (and debit card) fraud -- not to mention inconvenience.


    Say, the issuing bank sets up an allocation of a $200 instant cashback bonus for your first $200 charged with an ApplePay credit or debit card ... and, say, that you can use that very same cashback bonus to purchase the iPhone 6 (so you can pay with your ApplePay credit or debit card ).


    Every one wins!
    These numbers support your suggestion, http://www.cardhub.com/edu/credit-debit-card-fraud-statistics/

    ---
    Despite the fact that fraud only impacts a fraction of one percent of all purchases made with plastic, according to data from the Federal Reserve, it represents one of the biggest concerns among consumers. 

      <li style="margin-bottom:12px;">Credit card and debit card fraud resulted in losses amounting to $11.27 billion during 2012. Card issuers and merchants incurred 63% and 37% of those losses, respectively, with the following transactional breakdown:
      <ul style="margin-bottom:9px;"><li style="margin-bottom:12px;margin-top:9px;">
    Card issuer losses occur mainly at the point of sale from counterfeit cards while merchant losses occur mainly on card-not- present (CNP) transactions on the Web, at a call center or through mail order.</li>

    </ul>
    </li>


    If ApplePay, and other truly secure payment systems, could make a very significant dent in this cost and since the cost of card fraud doesn't actually cost that much to the card company, then why couldn't the card companies/supporting banks make an even higher contribution to the cost of an iPhone to a point where the iPhone is paid for. This would mean a reduction in cellular company contract support allowing them to reduce their charges (latter part will never happen). Apple doesn't have to lose any money, consumer concerns about fraud are reduced, and everybody is happy! Well, maybe sometime this could work but some financial people will say it won't and MCX members will still want their advertising PII.


    Great link on CC fraud!

    But there is even more! The consumer eats some costs too! We've had credit cards compromised 3 times this year ...

    Each time it happened before we could cancel some AutoPay transactions we had setup to pay some recurring bills.

    This is typically what happens:
    • bill submitted by vendor to cc company for AutoPay
    • payment declined by cc company
    • vendor charges our bill [account] for declined payment or late charge -- typically $25 - $40
    • some banks charge our account for declined payment -- typically $15 - $25
    • late/missed payment detected by credit score company

    So, we no-longer use AutoPay and suffer the inconvenience of manually paying recurring bills.
  • Reply 17 of 26
    Other things that MCX offers merchants are: rewards/loyalty programs, inter and intra-merchant * tracking, purchase history and ad hoc offers based on past transactions ...

    These need not be sacrificed in order to use Apple Pay! A merchant could have an app on the iPhone that provides these services as long as the consumer is willing to provide some info (not including bank, DL, Health, personal or private info). The app could be triggered by iBeacons -- so it could be very convenient. I suspect that the next release of Apple Pay will accommodate rewards/loyalty programs as an extension.

    So the real [admitted] driving force of MCX is to hurt the cc companies.


    * It will be interesting to see what intra-merchant data someone like Walmart will supply to a direct competitor like Target -- and vise versa
  • Reply 18 of 26
    calicali Posts: 3,495member
    "We're gonna get married later this week"
    -Tim Cook

    Did Tim Cook and Jack Ma tie the knot?
    Did I miss the wedding? I really wanna see some photos!!
  • Reply 19 of 26
    gatorguygatorguy Posts: 21,300member
    Alipay is also wooing PayPal for a partnership. Cover all their bases , eh?

    "Alipay, which has about 700 million registered accounts, said it wants to partner with PayPal, in addition to its ongoing talks with Apple to join Apple Pay. Here’s what Joseph Tsai, vice chairman of Alibaba, which effectively owns Alipay, told Bloomberg Businessweek:

    “If you look at our footprint of being the largest online payment company in China, and PayPal’s position of having a very good international position, not just in the U.S. but also in some other countries, these are some complementary footprints,” Tsai said today in Hangzhou, China.

    PayPal has 157 million active accounts. More than half of PayPal’s revenue comes from outside the US.

    Alipay’s overture comes as Alibaba records a record volume of one-day e-commerce sales in China. The one-day sale, which as of this morning had generated more than $8 billion of revenue, marks what is called Singles’ Day in China. Alibaba makes it an annual sales day.

    As for Apple, Alipay officials are said to be in active negotiations, following the disclosure last month that Jack Ma, Alibaba’s chairman, and Tim Cook, Apple’s CEO, had discussed an Alipay-Apple Pay joint venture.

    Whether Apple will ditch Alipay if it does a PayPal deal remains to be seen."
  • Reply 20 of 26
    paxmanpaxman Posts: 4,616member
    Quote:

    Originally Posted by rob53 View Post

     

    Wells Fargo lets me transfer money fairly easily to someone else and while I like the possibility of doing things like this it also scares me that they would accept a transfer based on an email address. 

     

    As far as bypassing credit card companies, that's fine for retailers but I'll be damned if I'm going to give everyone my banking account information. I give it to a select few utility companies for autopayment but I'd rather give them a credit card because this third-party company protects me from the retailer and hacker getting to my money. As for AMEX, I use them a lot because they have taken care of me when my card number was stolen and used to create a fake card. This card was used multiple times in Canada. AMEX contacted me because they suspected fraudulent charges and put a hold on my account. The retailer took it and didn't care. If this had been MCX, my back account would have been emptied before I could have done anything about it. I'm sorry that AMEX costs you but I'm sure you just pass it on to your customers. It's a cost of doing business and I'm sure you can write it off as an expense. I also believe people with AMEX cards tend to spend more money so not accepting it actually costs you money in lost sales. 

     

    edited: Just saw this video article, didn't bother to watch it but it asks the question I answered (at least my opinion). It's not just ApplePay, it's credit card use in general. 


    • "Will Apple Pay make you spend more? We take a look at the three questions that matter most about Apple Pay: Is it easy to use? Is it safe? Will it change people's behavior?" [Video Report] CNNMoney 10:06 AM


     

    They don't accept anything based on an email address. You have to log into your online banking account and issue the payment. It is very easy and how I pay many of my bills. Like I said, there is too much friction for high volume sales, but it is very quick and easy and costs next to nothing. Essentially all you do is authorize  payment, bank to bank.

    Here's a bit of their sales pitch:

     

    None of your financial details, card numbers or login information are shared with the online retailer or third parties. 

    Your payment is completed through your Financial Institution, who transfers the funds to the online retailer using established and secure banking procedures. 


     

    And yes, as a merchant all expenses are eventually paid for by the customer but AmEx is responsible for increasing everybody's price in order to serve its customers. I am not a fan of that philosophy though I obviously can see the attraction for Amex users. The added service that Amex provides its customers should, in my opinion, be borne by the Amex customer alone. By all means hide it and call it something else, but other customers, and least of all the ones with limited funds should not have to pay. If merchants were allowed to differentiate pricing based on the percentage that card companies charge it would be a different story but merchants aren't allowed to do that. 

     

    Anyway, as you and Applebaum point out, the reduction in card fraud resultant from the ApplePay implementation will be good for everyone, and especially the CreditCard companies. 

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