Apple halved transaction fee to get Apple Pay into China, report says
In order to launch Apple Pay in the lucrative China market, Apple agreed to halve its normal transaction fee for the country's banks, a report said on Monday.
Whereas Apple is thought to claim about 0.15 percent per transaction in the U.S., the equivalent fee is approximately 0.07 percent in China, sources informed Caixin. American merchants can sometimes pay up to 2 percent in overall fees for a card transaction, but in China, the total can be as low as 0.38 percent -- making an extra 0.15 percent a comparatively large burden.
High fees are believed have been the major resistance point in negotiations during 2015. Apple ultimately announced a deal in December, and launched the payment platform with 19 Chinese banks on Feb. 18, though not all partners are yet live.
Sign-up demand was intense enough on Thursday that a number of people ran into error messages when trying to add cards. Traffic has since stabilized.
Apple has suggested that China could eventually become the largest market for Apple Pay. The service is currently available in just a handful of regions, the others being the U.S., the U.K., Canada, and Australia. In the latter two countries it can only be used with American Express cards, which aren't commonplace. Spain, Singapore, and Hong Kong are among planned expansions.
Whereas Apple is thought to claim about 0.15 percent per transaction in the U.S., the equivalent fee is approximately 0.07 percent in China, sources informed Caixin. American merchants can sometimes pay up to 2 percent in overall fees for a card transaction, but in China, the total can be as low as 0.38 percent -- making an extra 0.15 percent a comparatively large burden.
High fees are believed have been the major resistance point in negotiations during 2015. Apple ultimately announced a deal in December, and launched the payment platform with 19 Chinese banks on Feb. 18, though not all partners are yet live.
Sign-up demand was intense enough on Thursday that a number of people ran into error messages when trying to add cards. Traffic has since stabilized.
Apple has suggested that China could eventually become the largest market for Apple Pay. The service is currently available in just a handful of regions, the others being the U.S., the U.K., Canada, and Australia. In the latter two countries it can only be used with American Express cards, which aren't commonplace. Spain, Singapore, and Hong Kong are among planned expansions.
Comments
China is a strict market so they had to go cheaper but they're HUGE so a small fee is still a great deal when your population is over a billion.
And it's a pain for Apple, as it gives the banks a new talking point: "You changed it for China, why not for us?" Telling them it's because of the volume of the market is just going to get them to say "Apple don't care about Australia", and take the moral high ground.
It would be good for consumers if they were a bit more flexible in their rates, but something big is going to need to happen before they will.
And you can simply tell by e-commence volume, the biggest week of Taobao is bigger then Ebay US yearly revenue.
And they will, if they feel the Australian market is worth making such a concession for.
There simply is not the slightest incentive for established operators to let Apple free load on their infrastructure and take revenue from them. They are not stupid.
That's because my old slow credit union does not yet provide this on their debit card. Hopefully they get in gear before I move the accounts to a competing credit union that does already offer Apple Pay.
Collectively we shall see if volume matters