That’s what I suspected. In this particular case, the US are still using neolithic technologies.
Conversely, where it is in use, e.g. in Europe (I think), Apple will never be able to coax the merchants or banks to use its system. It’s just pointless.
Apple system is NFC. They chose the best communication standard for mobile payments. It's an open standard anyone can use… and do use. It's already supported in Europe, but instead of the insecurity of a card with your number, name, and other info printed on it Apple's system is a token that never transmits your card's actual data and is protected by their Secure Element.
Apple system is NFC. They choose the best communication standard for mobile payments. It's an open standard anyone can use… and do use. It's already supported in Europe, but instead of the insecurity of a card with your number, name, and other info printed on it Apple's system is a token that never transmits your card's actual data and is protected by their Secure Element.
Ours also is both chip/NFC. But it would require a huge overhaul of all the infrastructure already installed in Europe to be compatible with Apple's protocol. And since, as far as I know, the price of the terminal is supported by the merchant, I really doubt they will invest in a system that would be used for one out of a thousand or so customer.
It will come across as greed by Apple out to make every nickel and as much as they can get from people - which is business. But Apple will be perceived as ripping people off.
My feeling is Apple is greedy and really only selling to the mid-high to high end customers. And its apparent in their market share.
So be it. Not so thrilled with the new phones, aside from the cameras which are a little better.
Will wait for the 6S at least.
That whole thing is ridiculous. He's just saying this as some sort of mushy dream. Apple has no intention of even attempting to do something such as that, and everyone here knows that. You should too.
Apple isn't any more greedy than any other company, and certainly less greedy than Amazon and Google.
Selling higher quality products has nothing to do with greed.
Here in France, there is no swipe anymore since… eons. You have to insert your card in the reader, wait for it to be ready and then dial your PIN code (4 digits). <span style="line-height:1.4em;">The NFC system bypasses the need to type the PIN code, so it is way faster. BUT, of course, it is limited: you can do a maximum of four NFC transactions in a row, and those cannot amount to more than € 20. At the 5th or if the total amount is greater than € 20, you have to revert to the standard procedure. Mileage may vary according to the </span>
security<span style="line-height:1.4em;"> rules of the bank you're in.</span>
That's been a problem with these NFC "solutions". Even in London Transport, I could only buy so much on my Oyster card. After about 25£, or so, it wouldn't let me buy anymore for the day.
I would hope that Apple's solution using all major credit card providers and all major issuing banks, that it will actually be useful, unlike the others before it.
It is easy to give up some of the $40B in fees if it more than offset the loses from CC fraud.
Part of the reason CC companies charge you 27% interest for not paying off the balance each month is to cover the loses they incur due to people not protecting their CC transaction and having companies like Target and Home Depot storing all your purchasing transaction data so they have a history of the business you do with them.
Apple Pay is not going to make the retailer happy since you will not become anonymous to them again, since now of your personal information will be transmitted with the CC transaction. The only way they will know who you are is if you provide them your phone number or have loyalty card with them.
I can see all banks and CC companies forcing mechents to do away with card swipe machine like they did with the old carbon paper CC receipts. Today CC charge a higher fee if you do a paper transaction verse electronic and most likely they will charge extra for a card swipe now that Apple Pay is available.
I've seen some estimates that it could eventually be more than $10 billion a year, depending on exactly what they do with it.
We really don't have any numbers or other info to start making a profile. Even moving a parameter of Apple's fraud responsibility from 10% to 50% to 100% if an iPhone is used illegally to make a purchase the interest by the financial institutions could vary greatly. In Apple's favour the sheer number of high profile financial institutions is impressive but I do wonder about Discover not bitting and that remaining 17% of banks. What was the issue there? With the 17% of banks they may not have tried with most of the others but with Discover I'm sure they were there right from the start even though they are the smaller of the 4 companies. Apple could even be doing this at a break even exchange to line some something better down the road, not unlike what they did with the iTunes [Music} Store or perhaps they also got transactions using their NFC system to remove nearly all transaction fees at Apple Store.
That’s what I suspected. In this particular case, the US are still using neolithic technologies.
Conversely, where it is in use, e.g. in Europe (I think), Apple will never be able to coax the merchants or banks to use its system. It’s just pointless.
Apple's system is far more secure. NFC readers can swipe your card info and someone can grab your PIN with a thermal camera. Because Apple generates one time code for the transaction. The sniffer doesn't get a whole lot of useful information.
It may be "neolithic" but swipe + pin or ID is no less secure than NFC + PIN and not that much more burdensome. So the US is leapfrogging the intermediate step of NFC cards to what will be a much better solution.
The objection noted in the zdnet article regarding American reluctance for a contactless system is mitigated by TouchID. 2-factor (phone and biometric), no PIN, easy to use, secure and private.
If the Europeans don't adopt it...well too bad for you guys.
It's faster, no need to enter a pin or if in America go through the hassle of showing your ID/having to sign for the transaction. However it only works on small payments, what is exciting about the Apple Pay system is that it should cover all payments both large and small.
Hopefully this will roll out quickly and not become the stagnant abortion that iTunes Radio has become, heck it's only been a year with no sign of that service in most countries. Pathetic really.
You can't blame Apple for lack of distribution of something such as iTunes Radio. Apple had this same problem with everything they do worldwide. They need to negotiate with every entity in every country they enter. It takes years. You might remember that Apple was almost sued by the EU for having different prices in every web store in each country in the EU. But when Apple showed them that it was the licensing authorities in each country that forced that, the EU backed down, and blamed the individual countries for violating the EU rules over that. Still, the EU can't seem to enforce their own laws and rules in the various countries that make it up.
So Apple needs to negotiate everywhere it goes. They can't negotiate everywhere at once. So they pick their fights in the order in which it makes sense for the company.
The same thing will happen here. Start in the biggest, richest, individual market, which just happens to be their home market. Most every company starts in their home market, where the rules and laws are best known to them, and branch out from there. They've got to negotiate with the issuing banks in every country. Do you know how many banks that is? And then, the banking and credit laws differ everywhere. They need to account for that too. This is a very complex business that makes the iTunes difficulty seem minor—and that took years.
Funny thing is I see people with those cards go up to card readers and swipe them because they don't know they can wave it at the card reader. Honestly for a payment card I'm not sure if waving it at a card reader is any faster than simply swiping it though?
I tried, but not all "terminals" are activated using NFC and there are competing systems that don't always work together.
That’s what I suspected. In this particular case, the US are still using neolithic technologies.
Conversely, where it is in use, e.g. in Europe (I think), Apple will never be able to coax the merchants or banks to use its system. It’s just pointless.
The problem in the EU and, Eastern Europe, is that credit card fraud has been much higher than in the USA. That's one reason why so many transactions had been required through a debit card rather than through a credit card. Here, debit cards are still well behind credit cards in usage. It's also why chipped cards were forced in Europe, and have been gives the cold shoulder here, so far, at least.
This is much more secure than chipped cards, which have been shown to not be all that much more secure than non chipped cards. And standard NFC solutions have also been shown to not be very secure.
Once this is shown to work here, banks in Europe will follow. They always do.
Well, USA banks have been wary because in the EU it hasn't led to much of a reduction in fraud.
And the reason for fraud is because it's no different than using the magnetic strip on a Debit/CC because it's still the physical card. I see no avenue how this will not adopted rapidly as the most secure payment system.
(I know you know this but I fear many will not the difference if they are both NFC)
Ours also is both chip/NFC. But it would require a huge overhaul of all the infrastructure already installed in Europe to be compatible with Apple's protocol. And since, as far as I know, the price of the terminal is supported by the merchant, I really doubt they will invest in a system that would be used for one out of a thousand or so customer.
They either support the old, simple RFID standard or it's NFC. If it's NFC then it supports Apple's system since Apple supports NFC. The token is unique here but that gets taken care of by the payment center who tells the merchant's system if the payment is accepted or not. It's transparent. Again, there is no "Apple protocol" for NFC.
I do wonder about Discover not bitting and that remaining 17% of banks. What was the issue there?
Geez, because Apple is driving a hard bargain and Discover is actually a decent card that doesn't try to screw card holders. But the reality is that with AmEx and the rest in they can't afford to be left out. Hence the twitter message from Discover.
I use my discover card most for the cash back and bonuses but if it's easier to use my amex or rewards visa I'll do that instead. Discover can't afford me and a bunch of other iPhone owners doing that.
There isn't one. There are now three major groups that are pushing their unique methods. None have caught on. The crappy way it's done now is not considered to be secure, which is a major reason why purchasing power has been limited so much. This is the first major improvement to mobile payment systems that has a chance of being successful.
Ours also is both chip/NFC. But it would require a huge overhaul of all the infrastructure already installed in Europe to be compatible with Apple's protocol. And since, as far as I know, the price of the terminal is supported by the merchant, I really doubt they will invest in a system that would be used for one out of a thousand or so customer.
If that were the case, yes. But it won't be one in a thousand customers. It will be, at first, one in fifteen, in the EU. One in five in Japan, and one in four in the USA. Those numbers will go up. iOS users have been shown to spend much more than other mobile users. That's with iOS devices, and in general. That makes up for lack of majority status.
Apple gets a portion of the fee and, in return, accepts some of the liability for fraud.
Because the security is good, fraud should be quite low. Hopefully zero.
But what this does is create a competitive weapon against Samsung which so far doesn't have a decent fingerprint reader of secure enclave. If Samsung wants to copy this then they will have to do a much better job than they've done so far. Even then it will take time. Or Samsung could copy the deal Apple has with the banks - and accept the liability for fraud. And that could be expensive. Very expensive.
With regard to possible use in Europe - this uses NFC so the NFC-enabled terminals should be OK. Maybe a firmware update. The issue will be having the software at the banks and CC processors able to handle the new token transactions (not the same as currently used, I believe). I expect that they will do it but Apple might go slow on the rollout to make sure that stuff works properly in volume.
Overall everyone will win from this. Credit card issuers make money every time a consumer uses their card and if consumers decide to use their cards more often because of the ease of Apple Pay then Visa, MC, Amex, and Discover will be happy.
For merchants I'm assuming the fees will be about the same as normal, but they will benefit from higher end Apple customers frequenting their stores moreso than stores that don't support NFC or "Apple Pay technology".
Myself personally if I had an Apple Pay compatible device I would choose Walgreens over CVS if CVS didn't support Apple Pay. So in the end the retailers still win because they will have an edge on their competition (see: Staples vs OfficeMax, Petco vs Petsmart, McDs vs Burgee King).
And of course Apple wins because this will strengthen the ecosystem, and give them yet another revenue source.
Just so that you know, because this has been a source of confusion, there is no such thing as Apple Pay Technology. Apple Pay uses NFC to make payments, just as any other mobile card wallet. This means that any merchant that accepts NFC payments will accept Apple Pay, Google Wallet, Softcard, etc. The ones that Apple mentioned are retailers that have stated that they will be deploying NFC to all of their locations and not just a small handful. Both Walgreens and CVS accept NFC payments. I use both and use Google Wallet with them all of the time.
Hopefully this will roll out quickly and not become the stagnant abortion that iTunes Radio has become, heck it's only been a year with no sign of that service in most countries. Pathetic really.
This is the problem of the record labels. They control the copyrights, country by country.
This is part of the reason EU has pushed for EU-wide licensing but it hasn't happened yet.
Visa and MasterCard both have 0.11% assessment fees on total retail sales, in addition to a number of smaller charges. Discover%u2019s assessment fee is 0.15%.
In addition to these fees, each merchant services company %u2014 which acts as a go-between for you and your credit car provider %u2014 has its own additional fees, such as monthly payment gateway fees and statement fees. Merchants that process credit cards in store are subject to lower rates than those that process cards based on the numbers alone. American Express, in contrast to the other card issuers, issues merchant accounts directly and governs its own rates.
My understanding is that apple pay will now be the Go-Between for you credit card provider and will take those fees. They will be treated as card present so the lower rates are charged total. I am would think that apples fees are pretty small.
I am pretty sure that Elon Musk is very happy he sold paypal. They have a lot to loose.
Comments
Apple system is NFC. They chose the best communication standard for mobile payments. It's an open standard anyone can use… and do use. It's already supported in Europe, but instead of the insecurity of a card with your number, name, and other info printed on it Apple's system is a token that never transmits your card's actual data and is protected by their Secure Element.
(preempted)
Well, USA banks have been wary because in the EU it hasn't led to much of a reduction in fraud.
Apple system is NFC. They choose the best communication standard for mobile payments. It's an open standard anyone can use… and do use. It's already supported in Europe, but instead of the insecurity of a card with your number, name, and other info printed on it Apple's system is a token that never transmits your card's actual data and is protected by their Secure Element.
Ours also is both chip/NFC. But it would require a huge overhaul of all the infrastructure already installed in Europe to be compatible with Apple's protocol. And since, as far as I know, the price of the terminal is supported by the merchant, I really doubt they will invest in a system that would be used for one out of a thousand or so customer.
That whole thing is ridiculous. He's just saying this as some sort of mushy dream. Apple has no intention of even attempting to do something such as that, and everyone here knows that. You should too.
Apple isn't any more greedy than any other company, and certainly less greedy than Amazon and Google.
Selling higher quality products has nothing to do with greed.
That's been a problem with these NFC "solutions". Even in London Transport, I could only buy so much on my Oyster card. After about 25£, or so, it wouldn't let me buy anymore for the day.
I would hope that Apple's solution using all major credit card providers and all major issuing banks, that it will actually be useful, unlike the others before it.
It is easy to give up some of the $40B in fees if it more than offset the loses from CC fraud.
Part of the reason CC companies charge you 27% interest for not paying off the balance each month is to cover the loses they incur due to people not protecting their CC transaction and having companies like Target and Home Depot storing all your purchasing transaction data so they have a history of the business you do with them.
Apple Pay is not going to make the retailer happy since you will not become anonymous to them again, since now of your personal information will be transmitted with the CC transaction. The only way they will know who you are is if you provide them your phone number or have loyalty card with them.
I can see all banks and CC companies forcing mechents to do away with card swipe machine like they did with the old carbon paper CC receipts. Today CC charge a higher fee if you do a paper transaction verse electronic and most likely they will charge extra for a card swipe now that Apple Pay is available.
We really don't have any numbers or other info to start making a profile. Even moving a parameter of Apple's fraud responsibility from 10% to 50% to 100% if an iPhone is used illegally to make a purchase the interest by the financial institutions could vary greatly. In Apple's favour the sheer number of high profile financial institutions is impressive but I do wonder about Discover not bitting and that remaining 17% of banks. What was the issue there? With the 17% of banks they may not have tried with most of the others but with Discover I'm sure they were there right from the start even though they are the smaller of the 4 companies. Apple could even be doing this at a break even exchange to line some something better down the road, not unlike what they did with the iTunes [Music} Store or perhaps they also got transactions using their NFC system to remove nearly all transaction fees at Apple Store.
That’s what I suspected. In this particular case, the US are still using neolithic technologies.
Conversely, where it is in use, e.g. in Europe (I think), Apple will never be able to coax the merchants or banks to use its system. It’s just pointless.
Apple's system is far more secure. NFC readers can swipe your card info and someone can grab your PIN with a thermal camera. Because Apple generates one time code for the transaction. The sniffer doesn't get a whole lot of useful information.
It may be "neolithic" but swipe + pin or ID is no less secure than NFC + PIN and not that much more burdensome. So the US is leapfrogging the intermediate step of NFC cards to what will be a much better solution.
http://www.zdnet.com/researchers-use-shopping-cart-to-put-mobile-nfc-payment-theft-on-wheels-7000023584/
http://petapixel.com/2014/08/29/heres-iphone-thermal-cameras-can-used-steal-pin-codes/
The objection noted in the zdnet article regarding American reluctance for a contactless system is mitigated by TouchID. 2-factor (phone and biometric), no PIN, easy to use, secure and private.
If the Europeans don't adopt it...well too bad for you guys.
You can't blame Apple for lack of distribution of something such as iTunes Radio. Apple had this same problem with everything they do worldwide. They need to negotiate with every entity in every country they enter. It takes years. You might remember that Apple was almost sued by the EU for having different prices in every web store in each country in the EU. But when Apple showed them that it was the licensing authorities in each country that forced that, the EU backed down, and blamed the individual countries for violating the EU rules over that. Still, the EU can't seem to enforce their own laws and rules in the various countries that make it up.
So Apple needs to negotiate everywhere it goes. They can't negotiate everywhere at once. So they pick their fights in the order in which it makes sense for the company.
The same thing will happen here. Start in the biggest, richest, individual market, which just happens to be their home market. Most every company starts in their home market, where the rules and laws are best known to them, and branch out from there. They've got to negotiate with the issuing banks in every country. Do you know how many banks that is? And then, the banking and credit laws differ everywhere. They need to account for that too. This is a very complex business that makes the iTunes difficulty seem minor—and that took years.
Funny thing is I see people with those cards go up to card readers and swipe them because they don't know they can wave it at the card reader. Honestly for a payment card I'm not sure if waving it at a card reader is any faster than simply swiping it though?
I tried, but not all "terminals" are activated using NFC and there are competing systems that don't always work together.
The problem in the EU and, Eastern Europe, is that credit card fraud has been much higher than in the USA. That's one reason why so many transactions had been required through a debit card rather than through a credit card. Here, debit cards are still well behind credit cards in usage. It's also why chipped cards were forced in Europe, and have been gives the cold shoulder here, so far, at least.
This is much more secure than chipped cards, which have been shown to not be all that much more secure than non chipped cards. And standard NFC solutions have also been shown to not be very secure.
Once this is shown to work here, banks in Europe will follow. They always do.
And the reason for fraud is because it's no different than using the magnetic strip on a Debit/CC because it's still the physical card. I see no avenue how this will not adopted rapidly as the most secure payment system.
(I know you know this but I fear many will not the difference if they are both NFC)
They either support the old, simple RFID standard or it's NFC. If it's NFC then it supports Apple's system since Apple supports NFC. The token is unique here but that gets taken care of by the payment center who tells the merchant's system if the payment is accepted or not. It's transparent. Again, there is no "Apple protocol" for NFC.
I do wonder about Discover not bitting and that remaining 17% of banks. What was the issue there?
Geez, because Apple is driving a hard bargain and Discover is actually a decent card that doesn't try to screw card holders. But the reality is that with AmEx and the rest in they can't afford to be left out. Hence the twitter message from Discover.
I use my discover card most for the cash back and bonuses but if it's easier to use my amex or rewards visa I'll do that instead. Discover can't afford me and a bunch of other iPhone owners doing that.
There isn't one. There are now three major groups that are pushing their unique methods. None have caught on. The crappy way it's done now is not considered to be secure, which is a major reason why purchasing power has been limited so much. This is the first major improvement to mobile payment systems that has a chance of being successful.
If that were the case, yes. But it won't be one in a thousand customers. It will be, at first, one in fifteen, in the EU. One in five in Japan, and one in four in the USA. Those numbers will go up. iOS users have been shown to spend much more than other mobile users. That's with iOS devices, and in general. That makes up for lack of majority status.
Apple gets a portion of the fee and, in return, accepts some of the liability for fraud.
Because the security is good, fraud should be quite low. Hopefully zero.
But what this does is create a competitive weapon against Samsung which so far doesn't have a decent fingerprint reader of secure enclave. If Samsung wants to copy this then they will have to do a much better job than they've done so far. Even then it will take time. Or Samsung could copy the deal Apple has with the banks - and accept the liability for fraud. And that could be expensive. Very expensive.
With regard to possible use in Europe - this uses NFC so the NFC-enabled terminals should be OK. Maybe a firmware update. The issue will be having the software at the banks and CC processors able to handle the new token transactions (not the same as currently used, I believe). I expect that they will do it but Apple might go slow on the rollout to make sure that stuff works properly in volume.
Overall everyone will win from this. Credit card issuers make money every time a consumer uses their card and if consumers decide to use their cards more often because of the ease of Apple Pay then Visa, MC, Amex, and Discover will be happy.
For merchants I'm assuming the fees will be about the same as normal, but they will benefit from higher end Apple customers frequenting their stores moreso than stores that don't support NFC or "Apple Pay technology".
Myself personally if I had an Apple Pay compatible device I would choose Walgreens over CVS if CVS didn't support Apple Pay. So in the end the retailers still win because they will have an edge on their competition (see: Staples vs OfficeMax, Petco vs Petsmart, McDs vs Burgee King).
And of course Apple wins because this will strengthen the ecosystem, and give them yet another revenue source.
Just so that you know, because this has been a source of confusion, there is no such thing as Apple Pay Technology. Apple Pay uses NFC to make payments, just as any other mobile card wallet. This means that any merchant that accepts NFC payments will accept Apple Pay, Google Wallet, Softcard, etc. The ones that Apple mentioned are retailers that have stated that they will be deploying NFC to all of their locations and not just a small handful. Both Walgreens and CVS accept NFC payments. I use both and use Google Wallet with them all of the time.
Hopefully this will roll out quickly and not become the stagnant abortion that iTunes Radio has become, heck it's only been a year with no sign of that service in most countries. Pathetic really.
This is the problem of the record labels. They control the copyrights, country by country.
This is part of the reason EU has pushed for EU-wide licensing but it hasn't happened yet.
In addition to these fees, each merchant services company %u2014 which acts as a go-between for you and your credit car provider %u2014 has its own additional fees, such as monthly payment gateway fees and statement fees. Merchants that process credit cards in store are subject to lower rates than those that process cards based on the numbers alone. American Express, in contrast to the other card issuers, issues merchant accounts directly and governs its own rates.
My understanding is that apple pay will now be the Go-Between for you credit card provider and will take those fees. They will be treated as card present so the lower rates are charged total. I am would think that apples fees are pretty small.
I am pretty sure that Elon Musk is very happy he sold paypal. They have a lot to loose.