“In short, iPhone users in the EU will be able to replace Apple Pay and Apple's Wallet with offerings from other yfirms.”
I don’t think so. What EU has done is open up the possibility for other companies to create their own wallets. Pretend that this was in the USA, and Walmart created their own wallet, and MacDonalds their own etc.
That hasn’t created a freedom for me as a customer to choose a wallet. Instead they will have to have a Walmart wallet, a MacDonalds wallet etc in addition to Apple Wallet. I’m enforced to use several different wallets. In theory I will have to have a wallet app for wvery store I shop in. This is a freedom for the companies to create their own wallets, and I will have to use multiple wallets, NOT a freedom for me to choose one wallet that I can use everywhere.
The EU politicians have absolutely no clue what they’ve done. They’ve created a mess, not freedom for consumers.
This is more about removing Apples swipe fees from the merchants. Apple gets a small fee each time their wallet is selected, and banks hate this fee, and therefore want to create their own loop excluding Apple wallet. And to be clear, Apple didn't invent NFC, nor were they the first company to put it in a phone, so for them to use their power to 'gatekeep' this from business' and iPhone users should be removed I think.
No Apple did not invent NFC. No one ever claimed they did. However the tokenization they brought with Apple Pay added a great deal of security. I think especially in the US where using PINs with credit cards was a very slow adoption. And yes I know others have brought tokenization to their wallets, but I am fine with Apple Pay and if they take a small charge to make my transactions secure, merchants can add that to my bill. They seem to be good at passing on every other cost.
I agree! The tokenisation and biometric authentication to confirm the transaction makes it far more secure, compared to swiping the card itself. The card issuers have been charging far higher fees for every transaction, than Apple does. Those high fees have been covering not only the costs of doing the transactions but also the cost of paying money back to us customers in cases where we’ve been victims of skimming or others means of criminal withdrawal of money from our accounts.
It’s not so many years ago where you gave your card to the waiter in a restaurant and they went to the cash register to use the magnetic strip of the card in a card reader. A criminal working as a waiter could easily take a photo of the front of the card to get your card number, and a photo of the back to get the CCV/CVV three digit code on the back, and then use that to order stuff from the internet. It happened to a friend of mine about 15–20 years ago), when he was at some convention in Germany. Right after he got back home to Sweden another transaction was made with his card number in Germany and about 200 Euro was drawn from his account. He got his money back, and that is partly why the card issuers have those high fees.
With ApplePay this can’t happen,, but the card issuers still charge the high fees from merchants, and since they don’t have to pay for such fraudulent activities, those high fees are pure source of extra income for them. I think they should be forced to lower their fees instead of taking away the small fee Apple charges.
No one even mentions Mastercard and Visa as gatekeepers, even though they have a very solid oligopoly I know there are other card issuers like American Express, Diner’s Club etc, but Mastercard and Visa are the two dominant ones.
Walmart won't have anything they are not in Europe.
I know they’re not in Europe, but the guess some people reading and commenting here are from USA, and don’t know about stores we have here, so I used Walmart as an example, because they already knew that Walmart has rejected support for ApplePay and wants to have their own solution.
But live in Sweden, and there are stores here that have their own cards. Those stores are not in the USA, and many of them not even in other EU countries, like ICA for example. We have ICA, Coop, Lidl, H&M and many other stores here. Most of them already have their membership or customers bonus cards that gives some benefits, and some even have their own credit cards like IKEA (Ikano), ICA, Norwegian (airline and bank) and many more. How many of them will support other wallets, when they implement their own wallets?
Then I need a Norwegian wallet to by airplane tickets, an Ikano card alley to shop at IKEA, an ICA wallet to shop in ICA stores etc. Unless EU will force them to support all wallets from other companies, while ch would be very costly, my guess is that each one of them will require you to use their own wallet. This means I will have to install multiple wallets, and can not freely choose one wallet for all my purchases.
It's important to not lose sight of where we are coming from.
Apple was the gatekeeper of Wallet/Payments on iPhone. There was no way that was favouring consumer choice or competition. And it was taking a cut from every single transaction.
That is changing now.
Walmart might be a terrible example as, AFAIK, it doesn't accept any contactless payments from phone wallets except via its app. That is not dissimilar to your corner shop not accepting credit cards and only accepting cash (or the other way around).
They do accept other payment methods though so that is different to the iPhone where the only option of paying contactless through the device was Apple Pay.
Ikea, Lidl, H&m etc all accept contactless phone payments from sources they have no control over.
It's a completely different thing to have apps that incentivise customer loyalty. I use the Carrefour app with all its benefits but I don't have to use a Carrefour card or payment system to get the benefits.
You (and everyone as consumers) now has choice and decision making sway. If you do not like how a retail outlet works and it refuses to listen you can go with a competing store.
Multiple wallets is not an issue. Just like with most digital situations you will have a default choice and then be able to switch among the others as necessary.
That is how Apple Pay works when you have multiple cards on it.
My payment system (BBVA Pay) is fully integrated into the phone, App, biometric setup and offers far more than Apple could ever offer simply because it is a bank.
FWIW that is the only wallet I use because Google Pay still can't handle the dynamic CVC on my cards.
If the store accepts contactless, it accepts contactless payments by phone.
I have yet to run into anywhere that has refused the wallet I use and no one has obliged me to use an alternative system.
I agree! The tokenisation and biometric authentication to confirm the transaction makes it far more secure, compared to swiping the card itself. The card issuers have been charging far higher fees for every transaction, than Apple does. Those high fees have been covering not only the costs of doing the transactions but also the cost of paying money back to us customers in cases where we’ve been victims of skimming or others means of criminal withdrawal of money from our accounts.
It’s not so many years ago where you gave your card to the waiter in a restaurant and they went to the cash register to use the magnetic strip of the card in a card reader. A criminal working as a waiter could easily take a photo of the front of the card to get your card number, and a photo of the back to get the CCV/CVV three digit code on the back, and then use that to order stuff from the internet. It happened to a friend of mine about 15–20 years ago), when he was at some convention in Germany. Right after he got back home to Sweden another transaction was made with his card number in Germany and about 200 Euro was drawn from his account. He got his money back, and that is partly why the card issuers have those high fees.
With ApplePay this can’t happen,, but the card issuers still charge the high fees from merchants, and since they don’t have to pay for such fraudulent activities, those high fees are pure source of extra income for them. I think they should be forced to lower their fees instead of taking away the small fee Apple charges.
Just a reminder, the EMV standard, which enables a chip card based payment was created end of last century. It is about 20 years ago that in the EU people gradually moved to EMV standard. Not in every country at the same pace, but by 2008 the usage of EMV cards in the EU was more than 95%. The remaining 5% was mainly from people coming from abroad (like from the US, where they were using magnetic stripe until very recently).
The fraud you are describing must be quite old, at least in the EU. The last 10 years the waiter never takes the card with him, he brings a wireless payment terminal to the table of the customer. Even before the the existence of wireless payment terminals, I never gave my card to waiter, I usually stood up and went to payment terminal to pay. I know that in the US these things are different.
In terms of security there is no difference between a chip card payment and Apple Pay. In fact Apple Pay is using the same EMV standard as for the chip card, but Apple Pay is using NFC as a communication layer.
The fee that has to be paid to Apple for using Apple Pay is low but it is on top of the fee for the credit card company which has to be paid anyhow. And it does not reduce the fraud wrt. the chip card EMV transaction, so it is logical that merchants and banks are complaining about this extra fee.
Walmart won't have anything they are not in Europe.
I know they’re not in Europe, but the guess some people reading and commenting here are from USA, and don’t know about stores we have here, so I used Walmart as an example, because they already knew that Walmart has rejected support for ApplePay and wants to have their own solution.
But live in Sweden, and there are stores here that have their own cards. Those stores are not in the USA, and many of them not even in other EU countries, like ICA for example. We have ICA, Coop, Lidl, H&M and many other stores here. Most of them already have their membership or customers bonus cards that gives some benefits, and some even have their own credit cards like IKEA (Ikano), ICA, Norwegian (airline and bank) and many more. How many of them will support other wallets, when they implement their own wallets?
Then I need a Norwegian wallet to by airplane tickets, an Ikano card alley to shop at IKEA, an ICA wallet to shop in ICA stores etc. Unless EU will force them to support all wallets from other companies, while ch would be very costly, my guess is that each one of them will require you to use their own wallet. This means I will have to install multiple wallets, and can not freely choose one wallet for all my purchases.
It's important to not lose sight of where we are coming from.
Apple was the gatekeeper of Wallet/Payments on iPhone. There was no way that was favouring consumer choice or competition. And it was taking a cut from every single transaction.
That is changing now.
Walmart might be a terrible example as, AFAIK, it doesn't accept any contactless payments from phone wallets except via its app. That is not dissimilar to your corner shop not accepting credit cards and only accepting cash (or the other way around).
They do accept other payment methods though so that is different to the iPhone where the only option of paying contactless through the device was Apple Pay.
Ikea, Lidl, H&m etc all accept contactless phone payments from sources they have no control over.
It's a completely different thing to have apps that incentivise customer loyalty. I use the Carrefour app with all its benefits but I don't have to use a Carrefour card or payment system to get the benefits.
You (and everyone as consumers) now has choice and decision making sway. If you do not like how a retail outlet works and it refuses to listen you can go with a competing store.
Multiple wallets is not an issue. Just like with most digital situations you will have a default choice and then be able to switch among the others as necessary.
That is how Apple Pay works when you have multiple cards on it.
My payment system (BBVA Pay) is fully integrated into the phone, App, biometric setup and offers far more than Apple could ever offer simply because it is a bank.
FWIW that is the only wallet I use because Google Pay still can't handle the dynamic CVC on my cards.
If the store accepts contactless, it accepts contactless payments by phone.
I have yet to run into anywhere that has refused the wallet I use and no one has obliged me to use an alternative system.
I think more security, as in Apple Pay, benefits consumers. Competition? Sure if there is amazing innovative competition but I am not sure what the others would offer that would make me switch. Banks used to give toasters when you opened an account. I think I would want more than that now. Apple Pay has been accepted at Walmart Stores in Canada since 2020 but not in the US. Probably because we have used Tap to Pay with chipped cards for many years while the US continued to use swipes. Apple is opening up the NFC to others, but my prediction will be that there will not be mass migration from those of us that have used Apple Pay. Why would we lol?
I agree! The tokenisation and biometric authentication to confirm the transaction makes it far more secure, compared to swiping the card itself. The card issuers have been charging far higher fees for every transaction, than Apple does. Those high fees have been covering not only the costs of doing the transactions but also the cost of paying money back to us customers in cases where we’ve been victims of skimming or others means of criminal withdrawal of money from our accounts.
It’s not so many years ago where you gave your card to the waiter in a restaurant and they went to the cash register to use the magnetic strip of the card in a card reader. A criminal working as a waiter could easily take a photo of the front of the card to get your card number, and a photo of the back to get the CCV/CVV three digit code on the back, and then use that to order stuff from the internet. It happened to a friend of mine about 15–20 years ago), when he was at some convention in Germany. Right after he got back home to Sweden another transaction was made with his card number in Germany and about 200 Euro was drawn from his account. He got his money back, and that is partly why the card issuers have those high fees.
With ApplePay this can’t happen,, but the card issuers still charge the high fees from merchants, and since they don’t have to pay for such fraudulent activities, those high fees are pure source of extra income for them. I think they should be forced to lower their fees instead of taking away the small fee Apple charges.
Just a reminder, the EMV standard, which enables a chip card based payment was created end of last century. It is about 20 years ago that in the EU people gradually moved to EMV standard. Not in every country at the same pace, but by 2008 the usage of EMV cards in the EU was more than 95%. The remaining 5% was mainly from people coming from abroad (like from the US, where they were using magnetic stripe until very recently).
The fraud you are describing must be quite old, at least in the EU. The last 10 years the waiter never takes the card with him, he brings a wireless payment terminal to the table of the customer. Even before the the existence of wireless payment terminals, I never gave my card to waiter, I usually stood up and went to payment terminal to pay. I know that in the US these things are different.
In terms of security there is no difference between a chip card payment and Apple Pay. In fact Apple Pay is using the same EMV standard as for the chip card, but Apple Pay is using NFC as a communication layer.
The fee that has to be paid to Apple for using Apple Pay is low but it is on top of the fee for the credit card company which has to be paid anyhow. And it does not reduce the fraud wrt. the chip card EMV transaction, so it is logical that merchants and banks are complaining about this extra fee.
Tap to Pay and Apple Pay both use tokens within the EMV standard. The additional security comes from the authentication of the Apple device, being face or finger based. Otherwise anyone who has your card can tap to the card's limit. I am not sure how Apple's security compares with Android based phones, as there are so many models.
No one even mentions Mastercard and Visa as gatekeepers, even though they have a very solid oligopoly I know there are other card issuers like American Express, Diner’s Club etc, but Mastercard and Visa are the two dominant ones.
Visa and Mastercard's interchange fees are regulated and capped in the EU, roughly 0.3-0.4% of the transaction amount on credit cards. Significantly lower than the US.
The majority of credit/debit card purchases are now Card Not Present (CNP) transactions and growing, it was 32% of all transactions in 2020 according to the Fed. Card present actually declined by 7%. ApplePay is considered card present by the issuers btw. The banks have massive fraud detection programs and algorithms to protect consumers and themselves from fraudsters. And as pointed out above, Apple pay operates with the EMV standard. While ApplePay does have have security embedded within it, Apple does not hold some kind of monopoly of credit card security.
Comments
Apple was the gatekeeper of Wallet/Payments on iPhone. There was no way that was favouring consumer choice or competition. And it was taking a cut from every single transaction.
That is changing now.
Walmart might be a terrible example as, AFAIK, it doesn't accept any contactless payments from phone wallets except via its app. That is not dissimilar to your corner shop not accepting credit cards and only accepting cash (or the other way around).
They do accept other payment methods though so that is different to the iPhone where the only option of paying contactless through the device was Apple Pay.
Ikea, Lidl, H&m etc all accept contactless phone payments from sources they have no control over.
It's a completely different thing to have apps that incentivise customer loyalty. I use the Carrefour app with all its benefits but I don't have to use a Carrefour card or payment system to get the benefits.
You (and everyone as consumers) now has choice and decision making sway. If you do not like how a retail outlet works and it refuses to listen you can go with a competing store.
Multiple wallets is not an issue. Just like with most digital situations you will have a default choice and then be able to switch among the others as necessary.
That is how Apple Pay works when you have multiple cards on it.
My payment system (BBVA Pay) is fully integrated into the phone, App, biometric setup and offers far more than Apple could ever offer simply because it is a bank.
FWIW that is the only wallet I use because Google Pay still can't handle the dynamic CVC on my cards.
If the store accepts contactless, it accepts contactless payments by phone.
I have yet to run into anywhere that has refused the wallet I use and no one has obliged me to use an alternative system.
I think more security, as in Apple Pay, benefits consumers. Competition? Sure if there is amazing innovative competition but I am not sure what the others would offer that would make me switch. Banks used to give toasters when you opened an account. I think I would want more than that now. Apple Pay has been accepted at Walmart Stores in Canada since 2020 but not in the US. Probably because we have used Tap to Pay with chipped cards for many years while the US continued to use swipes. Apple is opening up the NFC to others, but my prediction will be that there will not be mass migration from those of us that have used Apple Pay. Why would we lol?
Tap to Pay and Apple Pay both use tokens within the EMV standard. The additional security comes from the authentication of the Apple device, being face or finger based. Otherwise anyone who has your card can tap to the card's limit. I am not sure how Apple's security compares with Android based phones, as there are so many models.
The banks have massive fraud detection programs and algorithms to protect consumers and themselves from fraudsters. And as pointed out above, Apple pay operates with the EMV standard.
While ApplePay does have have security embedded within it, Apple does not hold some kind of monopoly of credit card security.