I wish Apple could even take it a step further and compete with Square and Paypal directly. By this I mean they could allow users to accept Apple payments on their websites. Allow us to create buttons, shopping carts, the whole works. What would even be better is if Apple could compete on the price they charge in transaction fees. When Google Checkout first started they offered a price of only 2.2% compared to Paypal charging a fee of 2.9% but then not many months later Google suddenly went to 2.9% just like Paypal. If Apple could offer an alternative payment system and charge lower than 2.9% they would get a lot of people to switch their website stores to them from Paypal or Google since those fees add up very fast.
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
The only problem is, they are incredibly low-valued (low P/E) businesses. Apple's valuation will look even worse....
I'm not suggesting a spin-off, I'm suggesting your iPhone replaces your credit card, you fund it through iTunes or securely connect it to your bank or credit union. I think it would work best on all devices with a thumbprint reader.
Another thing Apple could offer sellers is what they do for themselves for iTunes services -- reduce transaction fees paid to the CC Processor.
If you pay for small purchase with a credit card, the seller is charged a transaction fee.
When you pay for a small purchase through iTunes, iTunes (the seller) will often hold the transaction for later processing. The theory being that if you are in the iTunes store, and make a small purchase, it is likely that you will make additional small purchases while in the store. By holding these transactions, Apple can aggregate them into a single transaction with the CC Processor.
It's been a while, but let's assume a CC Transaction costs the seller a $0.25 Transaction Fee (In addition to a percent of the transaction amount).
So, you enter the iTunes Store, browse around and buy 5 Songs for $1.00 each.
If Apple submits 5 separate transactions, Apple would be charged 5 x $0.25 or $1.25 total for 5 songs.
By holding and aggregating these into a single transaction, Apple is charged just $0.25 -- a cost of $0.05 per song as opposed to $0.25 per song
I wish Apple could even take it a step further and compete with Square and Paypal directly. By this I mean they could allow users to accept Apple payments on their websites. Allow us to create buttons, shopping carts, the whole works. What would even be better is if Apple could compete on the price they charge in transaction fees. When Google Checkout first started they offered a price of only 2.2% compared to Paypal charging a fee of 2.9% but then not many months later Google suddenly went to 2.9% just like Paypal. If Apple could offer an alternative payment system and charge lower than 2.9% they would get a lot of people to switch their website stores to them from Paypal or Google since those fees add up very fast.
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
There are more charges/fees to the seller than just those fees you mention:
At the time your merchant account is set up, most merchant service providers will require an initial fee. Such one-time fees could be called anything from an application fee to a setup fee to a gateway setup fee, or something else. Regardless of the name given, they are the fee to get started with your merchant account.
Additional one-time fees may come in the form of costs for the software or equipment necessary for processing credit card transactions.
Separately, nearly every merchant service provider will charge some form of monthly fee as an ongoing cost of keeping the merchant account available. This monthly fee may be known as a statement fee, account fee, report fee or by another name.
Some merchant accounts will charge several monthly fees that often run anywhere from $10 to $30 a month. Meanwhile, other merchant service providers will charge a monthly fee as an alternative (or sometimes as well as) the monthly fees.
Meanwhile, when processing each credit card transaction, they are usually two costs. The first of these is a per item fee that usually amounts to between 20 cents and 50 cents.
The second charge is the discount rate, which is a percentage of the transaction amount that depends on the type of credit card and the processing method. The discount rate, also known as an interchange fee, generally amounts to 2 percent to 4 percent and primarily goes to credit card issuer.
When looking to compare fees among various merchant service providers, be aware that the presentation of fees may not be as clear cut as outlined above. Also, different rates may apply depending on the type of card used, which is based on both the card association, such as Visa or MasterCard, and the type of card, such as a reward credit card or debit card.
Furthermore, fees are impacted by whether the transaction is processed by being swiped, keyed in, or another method, as well as if the card passed certain fraud prevention criteria.
That's just the charges... You also need to pay your accountant to submit the charges, reconcile with the bank's statements... And, if you have a merchant account, you must maintain a minimum balance (Last time I did it, the minimum balance was $25,000 for a small business).
Fascinating chart! Apple is sitting on so much unrealized value.... ugh.
eBay as a whole only makes around $700m net profit per quarter and about half is from Paypal. Transaction fees are very small. They do have a lot of costs that Apple wouldn't necessarily have though and if Apple could get 4x the volume as well as push more into retail transactions than Paypal does, they could get maybe an extra $1-2b net income per quarter from it.
Another interesting thing about Paypal that they put in their 10K:
"Changes to payment card networks or bank fees, rules, or practices could harm PayPal's business.
PayPal does not directly access payment card networks, such as Visa and MasterCard, which enable PayPal's acceptance of credit cards and debit cards (including some types of prepaid cards). As a result, PayPal must rely on banks or other payment processors to process transactions, and must pay fees for this service. From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction using one of their cards."
They won't be doing anything more than Apple is already doing.
I already replied this to jungmark: the stupidity is in the conclusion.
Yeah, partnering with Microsoft, stolen OS, partnering with Google, stolen OS; how STUPID to conclude that Apple’s intellectual property will be stolen when the partner with another company on a low level item.
Fascinating chart! Apple is sitting on so much unrealized value.... ugh.
eBay as a whole only makes around $700m net profit per quarter and about half is from Paypal. Transaction fees are very small. They do have a lot of costs that Apple wouldn't necessarily have though and if Apple could get 4x the volume as well as push more into retail transactions than Paypal does, they could get maybe an extra $1-2b net income per quarter from it.
Another interesting thing about Paypal that they put in their 10K:
"Changes to payment card networks or bank fees, rules, or practices could harm PayPal's business.
PayPal does not directly access payment card networks, such as Visa and MasterCard, which enable PayPal's acceptance of credit cards and debit cards (including some types of prepaid cards). As a result, PayPal must rely on banks or other payment processors to process transactions, and must pay fees for this service. From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction using one of their cards."
They won't be doing anything more than Apple is already doing.
There is some opportunity out there, though...
Especially if you are sitting on $150 billion in cash earning 2% interest.
Or, they could leverage that cash and finance low-interest loans and still come out ahead...
It certainly could be marketed to sellers -- especially small sellers:
no merchant account (minimum balance)
reduced transaction fees
reduced discount rates
reduced accounting charges
improved recourse in case of claims (both the customer and seller)
Many small sellers choose to go with Paypal precisely because there are no monthly or yearly merchant fees that dedicated credit card processing services charge. Big volume sellers have a big advantage over small sellers. Here is the chart for Paypal seller fees. They only charge you a monthly fee if you want to process credit cards over the phone.
For several years, Apple allowed members to log in to iTunes with their AOL IDs and Passwords.
On a different topic, look for Google to become the world's most valuable company today or tomorrow. There is currently a $70 billion difference between the companies. All Wall Street has to do is drop Apple's stock while pushing up Google's stock. And, with Google's earnings on tap later today, there is a really good chance Google's stock will increase no matter what Google announces.
Google has to pass Exxon as well in order to become the world's most valuable company. Even with its current 3% up day, GOOG is at $381B.
Exxon is at $413B, AAPL at $452B.
I don't see GOOG reaching AAPL's level today or tomorrow, and I don't see AAPL dropping very much from these punished levels either.
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
There is the card issuer, the underlying bank account, and the payment card processor (retailer->PCP -> Card Issuer -> Holders bank account)
Apple can be all 4 of those... and my reckoning is aiming for at least 3.
$153Billion can spin up a few nice banks someplace where banking laws align well to Apple's clientele.
Or they could buy a couple banks (US, China) and get past the regulatory hurdles of creating one and then become a card issuer. The next thing then is just creating an Apple Credit (and/or Debit) Card that can be put into your ewallet. The key thing is getting the interest rates on all those purchases (10-15% is a good ROI for that cash in the bank).
Given Apple's volume via ITMS... I'm sure they are hooked up tightly to a very good payment processor, and are getting really good rates (well less than 3%) per transaction, to the point it's likely a wash for apple to buy/create one of it's own.
So in the end... you get eWallet loaded up with a Apple Card (works everywhere) or just your 'AppleAccount' in ITMS (works with all retailers hooked to Apple's payment system), which can have any credit/debit card attached (avoiding anti-competitive issues), and then have that Apple Card fronted by an Apple Bank, which can provided credit card as well as debit cards , and loan servicing (hey... That Mac Pro... only $100 a month... click here to open up a 36 month loan).
Can you see Apple partnering with someone and sharing the profit? They don't need to partner with a "big name" because Apple are the biggest name. They don't need to partner with a company for their database of people, Apple already have the biggest database of credit cards. They don't need to partner for the tech, they have had it for years.
All they need is themselves. If they did that, they could easily undercut everyone and blow paypal out of the water.
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
There is the card issuer, the underlying bank account, and the payment card processor (retailer->PCP -> Card Issuer -> Holders bank account)
Apple can be all 4 of those... and my reckoning is aiming for at least 3.
$153Billion can spin up a few nice banks someplace where banking laws align well to Apple's clientele.
Or they could buy a couple banks (US, China) and get past the regulatory hurdles of creating one and then become a card issuer. The next thing then is just creating an Apple Credit (and/or Debit) Card that can be put into your ewallet. The key thing is getting the interest rates on all those purchases (10-15% is a good ROI for that cash in the bank).
Given Apple's volume via ITMS... I'm sure they are hooked up tightly to a very good payment processor, and are getting really good rates (well less than 3%) per transaction, to the point it's likely a wash for apple to buy/create one of it's own.
So in the end... you get eWallet loaded up with a Apple Card (works everywhere) or just your 'AppleAccount' in ITMS (works with all retailers hooked to Apple's payment system), which can have any credit/debit card attached (avoiding anti-competitive issues), and then have that Apple Card fronted by an Apple Bank, which can provided credit card as well as debit cards , and loan servicing (hey... That Mac Pro... only $100 a month... click here to open up a 36 month loan).
Not only that nMac Pro but a nFerrari to haul it around
Wth...I'm pretty sure apple doesn't want to become a bank....
But why wouldn’t they want to be the middleman? Take 1/10th of a cent from every transaction and create a platform that every single company–from a two man job in a small town to Wal-Mart–will use and revolutionize the base act of purchasing a product for the first time since the digital cash register. By eliminating cash registers.
But why wouldn’t they want to be the middleman? Take 1/10th of a cent from every transaction and create a platform that every single company–from a two man job in a small town to Wal-Mart–will use and revolutionize the base act of purchasing a product for the first time since the digital cash register. By eliminating cash registers.
If they can figure out a way to be the middleman and not be a bank, great... But I work for a bank, and between anti money laundering rules, and know your customer rules, apple would need to have people dedicated to this. They would be one of the biggest banks so I'm talking thousands of individuals... Yeah banks make money, but if one of your employees forgets to put a suspicious activity referral for a guy he wasn't sure about, it's a 10 billion lawsuit....
Comments
Not sure if you read that correctly. Three examples: MS, Googs,Sammy
The stupidity is in the conclusion.
I wish Apple could even take it a step further and compete with Square and Paypal directly. By this I mean they could allow users to accept Apple payments on their websites. Allow us to create buttons, shopping carts, the whole works. What would even be better is if Apple could compete on the price they charge in transaction fees. When Google Checkout first started they offered a price of only 2.2% compared to Paypal charging a fee of 2.9% but then not many months later Google suddenly went to 2.9% just like Paypal. If Apple could offer an alternative payment system and charge lower than 2.9% they would get a lot of people to switch their website stores to them from Paypal or Google since those fees add up very fast.
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
I'm not suggesting a spin-off, I'm suggesting your iPhone replaces your credit card, you fund it through iTunes or securely connect it to your bank or credit union. I think it would work best on all devices with a thumbprint reader.
Apple could pair up with American Express and probably offer a lower fee based on the average Apple customer profile.
Thanks for admitting you think Google stole nothing from Apple. Now we know to listen to nothing you say in the future.
I already replied this to jungmark: the stupidity is in the conclusion.
And who's "we"? You've made it pretty clear so far that you only listen to people you agree with.
There are more charges/fees to the seller than just those fees you mention:
http://www.creditcards.com/credit-card-news/credit-card-fees-for-merchant-accounts-1275.php
That's just the charges... You also need to pay your accountant to submit the charges, reconcile with the bank's statements... And, if you have a merchant account, you must maintain a minimum balance (Last time I did it, the minimum balance was $25,000 for a small business).
Dare's a whole lotta' chargin' goin' on out dare!
eBay as a whole only makes around $700m net profit per quarter and about half is from Paypal. Transaction fees are very small. They do have a lot of costs that Apple wouldn't necessarily have though and if Apple could get 4x the volume as well as push more into retail transactions than Paypal does, they could get maybe an extra $1-2b net income per quarter from it.
Another interesting thing about Paypal that they put in their 10K:
"Changes to payment card networks or bank fees, rules, or practices could harm PayPal's business.
PayPal does not directly access payment card networks, such as Visa and MasterCard, which enable PayPal's acceptance of credit cards and debit cards (including some types of prepaid cards). As a result, PayPal must rely on banks or other payment processors to process transactions, and must pay fees for this service. From time to time, payment card networks have increased, and may increase in the future, the interchange fees and assessments that they charge for each transaction using one of their cards."
They won't be doing anything more than Apple is already doing.
I already replied this to jungmark: the stupidity is in the conclusion.
Yeah, partnering with Microsoft, stolen OS, partnering with Google, stolen OS; how STUPID to conclude that Apple’s intellectual property will be stolen when the partner with another company on a low level item.
There is some opportunity out there, though...
Especially if you are sitting on $150 billion in cash earning 2% interest.
Or, they could leverage that cash and finance low-interest loans and still come out ahead...
It certainly could be marketed to sellers -- especially small sellers:
I just enabled iTunes Store TouchID on my 5S...
Did some transactions using TouchID...
Slickest purchasing experience I've ever had -- bar none!
Many small sellers choose to go with Paypal precisely because there are no monthly or yearly merchant fees that dedicated credit card processing services charge. Big volume sellers have a big advantage over small sellers. Here is the chart for Paypal seller fees. They only charge you a monthly fee if you want to process credit cards over the phone.
For several years, Apple allowed members to log in to iTunes with their AOL IDs and Passwords.
On a different topic, look for Google to become the world's most valuable company today or tomorrow. There is currently a $70 billion difference between the companies. All Wall Street has to do is drop Apple's stock while pushing up Google's stock. And, with Google's earnings on tap later today, there is a really good chance Google's stock will increase no matter what Google announces.
Google has to pass Exxon as well in order to become the world's most valuable company. Even with its current 3% up day, GOOG is at $381B.
Exxon is at $413B, AAPL at $452B.
I don't see GOOG reaching AAPL's level today or tomorrow, and I don't see AAPL dropping very much from these punished levels either.
Thompsonm
This would be fine with me. Does this transaction charge include the credit card companies' charge as well? Probably not. I wish Apple would bypass the credit card companies and act as the bank as well. This might be more difficult for Apple to get approval for but there are already too many middlemen in the purchase operation. I'd rather pay using my iPhone, through iTunes or whatever Apple would use, then direct transfer money from my bank to Apple getting rid of the multiple layers that add more to everyone's product cost.
There is the card issuer, the underlying bank account, and the payment card processor (retailer->PCP -> Card Issuer -> Holders bank account)
Apple can be all 4 of those... and my reckoning is aiming for at least 3.
$153Billion can spin up a few nice banks someplace where banking laws align well to Apple's clientele.
Or they could buy a couple banks (US, China) and get past the regulatory hurdles of creating one and then become a card issuer. The next thing then is just creating an Apple Credit (and/or Debit) Card that can be put into your ewallet. The key thing is getting the interest rates on all those purchases (10-15% is a good ROI for that cash in the bank).
Given Apple's volume via ITMS... I'm sure they are hooked up tightly to a very good payment processor, and are getting really good rates (well less than 3%) per transaction, to the point it's likely a wash for apple to buy/create one of it's own.
So in the end... you get eWallet loaded up with a Apple Card (works everywhere) or just your 'AppleAccount' in ITMS (works with all retailers hooked to Apple's payment system), which can have any credit/debit card attached (avoiding anti-competitive issues), and then have that Apple Card fronted by an Apple Bank, which can provided credit card as well as debit cards , and loan servicing (hey... That Mac Pro... only $100 a month... click here to open up a 36 month loan).
They don't need to partner with a "big name" because Apple are the biggest name.
They don't need to partner with a company for their database of people, Apple already have the biggest database of credit cards.
They don't need to partner for the tech, they have had it for years.
All they need is themselves. If they did that, they could easily undercut everyone and blow paypal out of the water.
Not only that nMac Pro but a nFerrari to haul it around
But why wouldn’t they want to be the middleman? Take 1/10th of a cent from every transaction and create a platform that every single company–from a two man job in a small town to Wal-Mart–will use and revolutionize the base act of purchasing a product for the first time since the digital cash register. By eliminating cash registers.
If they can figure out a way to be the middleman and not be a bank, great... But I work for a bank, and between anti money laundering rules, and know your customer rules, apple would need to have people dedicated to this. They would be one of the biggest banks so I'm talking thousands of individuals... Yeah banks make money, but if one of your employees forgets to put a suspicious activity referral for a guy he wasn't sure about, it's a 10 billion lawsuit....