Apple to reportedly net 15 cents for every $100 Apple Pay transaction

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Comments

  • Reply 21 of 38
    I heard a trusted report saying that Apple closed the deal with many merchants because Apple's solution did not want access to customer purchase info.

    OTOH, Google //admantly insisted// on customer, location, product, and time info for its Wallet.
  • Reply 22 of 38

    For chip and pin to work (such as up here in Canada where it is commonplace), the security is purely a physical technology of chip recognition through inserting the chip into into a reader or NFC symbol tapped against an appropriate reader. Whereas the ApplePay appears to be a tokenized transaction model buffering card/account info and bank supplied physical credit/debit/hybrid cards that removes the physical contact and risk model of a plastic encoded card. I believe the same authorization process will happen behind the scenes but the tokenized process helps to isolate user's info from physical contact, theft, NFC capture (Apple secure touch is required till) or ID stealing. Now imagine having the option of paying either with credit card or placing the amount (say $50 limited maximum) to your phone bill through a simple slider on the home screen.... The future of cash seems slimmer every month that passes.

  • Reply 23 of 38
    Quote:

    Originally Posted by cfugle View Post

     

    For chip and pin to work (such as up here in Canada where it is commonplace), the security is purely a physical technology of chip recognition through inserting the chip into into a reader or NFC symbol tapped against an appropriate reader. Whereas the ApplePay appears to be a tokenized transaction model buffering card/account info and bank supplied physical credit/debit/hybrid cards that removes the physical contact and risk model of a plastic encoded card. I believe the same authorization process will happen behind the scenes but the tokenized process helps to isolate user's info from physical contact, theft, NFC capture (Apple secure touch is required till) or ID stealing. Now imagine having the option of paying either with credit card or placing the amount (say $50 limited maximum) to your phone bill through a simple slider on the home screen.... The future of cash seems slimmer every month that passes.


    There's a difference between chip+PIN and paywave, and that is that paywave isn't authenticated (i.e. no PIN). So the transaction limit is lower.

     

    The advantage of chip cards is that the information on the chip can't be copied, as happens a lot with today's mag-stripe cards. And the paywave implementation in the U.S. is such that the card info can actually be read at a distance of about 3 feet (1 m.) with a sensitive antenna. That info can then go onto a mag stripe card and - presto - your account is compromised. I don't know whether the paywave info can be read from a chip card and then put onto a mag stripe card. My solution is to never take a paywave card out of the house, and use it just for online orders.

  • Reply 24 of 38

    So if Apple receives .15 cents for every $100 dollars, then thats .0015 cents for every dollar.  In the Apple Pay keynote, there was a slide stating that 12 Billion dollars in 200 million transactions occurs every day in the USA for Credit Card/Debit.  If Apple Pay in the first year starts contributing 10% of this daily number that would be $1.2 billion transaction dollars a day times the .0015, would equate to 1.8 million dollars a day in revenue, or 657 million dollars a year, just from the USA.

  • Reply 25 of 38
    I was telling my wife about the tokinization benefits, and she had this question: if you use the iPhone to pay for something at a store, say Home Depot, will they still have a record of your purchase tied to tour name and card? This has been useful for receipt-less returns.
  • Reply 26 of 38
    bageljoey wrote: »
    I was telling my wife about the tokinization benefits, and she had this question: if you use the iPhone to pay for something at a store, say Home Depot, will they still have a record of your purchase tied to tour name and card? This has been useful for receipt-less returns.

    I'd like to know how that's handled also. The "token" removes the card number from the process, so presumably a refund would be credited back to another unique "tokenized" number (since all numbers are one-time use only)...
  • Reply 27 of 38
    IMO by the time it takes off in Europe we will be looking at the iPhone 7s. And until we can rely on having not to carry the actual card itself and all ships having this installed probably much longer. Still, it's the best implementation I have read about so far and one has to start somewhere. Looking forward to this.
  • Reply 28 of 38
    So .15 cents per $100 or .0015 cents per dollar. The Apple Pay keynote mentioned 12 billion dollars in 200 million cc/debit transactions per day in USA. So if Apple Pay could get 10% in first year, that would be $1.2 billion dollars X .0015 or 1.8 million dollars per day or 657 million dollars a year in USA alone.
  • Reply 29 of 38
    The fact that we haven't heard any rumours of Apple signing agreements with banks/retailers outside of the US yet makes me think it will be a while before it's rolled out beyond the US.

    Paywave is really common here in Australia and already implemented in a way that would work with ApplePay. Smaller transactions are authorised without a PIN and larger transactions (usually over $50) require a PIN which is the same PIN used for chip & PIN authentication.

    Being a smaller market to expand to I'm hopeful it will come out here next just like they did with iTunes radio. I don't think it will happen until some time in 2015 but hopefully it will be early 2015 - Maybe Feb/March.
  • Reply 30 of 38
    Quote:

    Originally Posted by RobM View Post



    In Breaking News - Sumsung releases a toe print scanner on its new range of phones so that it can authorise payments and get money, too ! They're rumoured to be called Featz Plus.

     

    Apple is going to raise a stink with the adoption of Apple Pay.

    Samsung is going to raise a stink the old fashioned way - smelly feet!

  • Reply 31 of 38
    Quote:

    Originally Posted by Chandra69 View Post

     

    15 cents. Isn't it less?


     

    I think it is just the first step to something bigger. The iTunes music store was not very profitable for a  long time, but it fundamentally changed the way we buy music and also changed Apple as a company.

     

    I think Apple Pay is a similarly disruptive service. There are a lot of parallels. For the iTMS, Apple got the record companies on board and for Apple Pay they have the CC companies on board.

    They didn't make a lot of money per song that was sold, similar to the 15 cents they are reportedly making per $100 or whatever.

     

    This is going to be huge. Tim Cook did the right thing by emphasising that Apple was the best combination of hardware, software and services.

  • Reply 32 of 38

    So if they process a huge amount, say $100 billion they make $1.5 billion.  Added to their 200B in revenue it doesn't even move the needle for them.  BTW $100B processed probably won't come for 5 to 10 years based on optimistic estimates.  Let's put Apple pay into perspective a little bit.  They make much more on Apple TV which also is a multi-billion dollar business but completely not relevant to Apple's revenue and profits which are dominated by iPhone almost entirely.

  • Reply 33 of 38
    Quote:

    Originally Posted by SpamSandwich View Post





    I'd like to know that's handled also. The "token" removes the card number from the process, so presumably a refund would be credited back to another unique "tokenized" number (since all numbers are one-time use only)...

    The merchant gets some data from the transaction, but certainly not your credit card account number. 

     

    I would guess that, in your example of a return to Home Depot, you would still have your paper receipt that they can scan the way they do today. Or maybe with Apple Pay you would get a receipt on your phone that could be used  to bring up HD's transaction record.

     

    The issue of what number/token is used is an internal issue with Visa/MasterCard. Whatever it is, it links back to your actual account at the card issuer or bank.

  • Reply 35 of 38
    Quote:


     

    Cash is good, but a completely secure, "cardless" solution (with no apparent means of stealing a signature, security code, or credit card number) instead of a credit card is much better if one must use credit.

  • Reply 36 of 38
    Quote:

    Originally Posted by mvigod View Post

     

    So if they process a huge amount, say $100 billion they make $1.5 billion.  Added to their 200B in revenue it doesn't even move the needle for them.  BTW $100B processed probably won't come for 5 to 10 years based on optimistic estimates.  Let's put Apple pay into perspective a little bit.  They make much more on Apple TV which also is a multi-billion dollar business but completely not relevant to Apple's revenue and profits which are dominated by iPhone almost entirely.


     

    My mistake and nobody caught it!  15 cents out of every $100.  On $100 billion in transactions apple only makes $150 million!  LOL.   

     

    So this is really bad then.  Out of a trillion dollars in transactions or about 1/15th of the entire GPD apple makes $1.5 billion.  Can anyone now realize how this doesn't move the needle at all?  Are wall street analysts this stupid???  You could make the assumption more devices will be sold or less churn but modeling in Apple Pay revenue is nuts.  Apple had almost 200B in revenue and 60B in EBITDA.   It will take them 5 to 10 years to get to a trillion if they even get there ever.  

     

    Anyone care to punch holes in my math or if I am missing something here???

  • Reply 37 of 38
    Quote:

    Originally Posted by mvigod View Post

    ... I am missing something here???

    The point you've missed is that this is not supposed to be a revenue generator in and of itself.

     

    It's supposed to

    1. sell more iPhones

    2. be a competitive advantage against Samsung 

     

    For example, Samsung's fingerprint reader is enough for a feature checklist but every reviewer says that it's quite poor. Samsung can do some kind of "secure element" but it will take time and money, and who knows how really secure it will be?

     

    I do not see Apple Pay as a profit center. Apple would have to be a bank for that (they get 2.5 - 3%) and I don't think that Apple wants to go there.

  • Reply 38 of 38
    Quote:

    Originally Posted by plovell View Post

     

    The point you've missed is that this is not supposed to be a revenue generator in and of itself.

     

    It's supposed to

    1. sell more iPhones

    2. be a competitive advantage against Samsung 

     

    For example, Samsung's fingerprint reader is enough for a feature checklist but every reviewer says that it's quite poor. Samsung can do some kind of "secure element" but it will take time and money, and who knows how really secure it will be?

     

    I do not see Apple Pay as a profit center. Apple would have to be a bank for that (they get 2.5 - 3%) and I don't think that Apple wants to go there.


     

    Oh no I have not missed that point at all. Read my post. That was exactly my point.  It won't be a revenue generator itself.  My point is that these "brilliant" MBA analysts have completely missed the point and think Apple Pay directly is a HUGE needle mover.  It isn't as you and I both point out and agree on.

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