MasterCard offers Londoners free Monday rides for using Apple Pay
In a special promotion, MasterCard is briefly letting people ride the Transport for London network for free on Mondays so long as they use Apple Pay.
The promotion is running from Nov. 23 through Dec. 14, according to MasterCard. The only condition is that users have to touch in and touch out using their iPhone 6/6s or Apple Watch.
It's not clear whether the promotion is being done independently or at the behest of Apple, especially as both companies benefit from Apple Pay. Each makes money off transactions, with MasterCard also gaining improved security, and Apple keeping people locked into its platforms.
Transport for London operates trains and buses across the city, including the famous London Underground. It was one of the first parties on board with Apple Pay when the service arrived in the U.K. in July.
Last week Apple Pay came to Canada and Australia via American Express. Simultaneously Apple added support for two more U.K. card issuers, TSB and Tesco Bank.
The promotion is running from Nov. 23 through Dec. 14, according to MasterCard. The only condition is that users have to touch in and touch out using their iPhone 6/6s or Apple Watch.
It's not clear whether the promotion is being done independently or at the behest of Apple, especially as both companies benefit from Apple Pay. Each makes money off transactions, with MasterCard also gaining improved security, and Apple keeping people locked into its platforms.
Transport for London operates trains and buses across the city, including the famous London Underground. It was one of the first parties on board with Apple Pay when the service arrived in the U.K. in July.
Last week Apple Pay came to Canada and Australia via American Express. Simultaneously Apple added support for two more U.K. card issuers, TSB and Tesco Bank.
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Separately, an article below mentions that Samsung is offering customers a $50 gift card to Best Buy if they sign up for Samsung Pay. Potentially Apple and its competitors in this new Payments space are making investments to drive adoption... which makes perfect sense in an emerging market.
http://www.businessinsider.com/samsung-will-pay-you-to-use-samsung-pay-2015-11
It probably charges the user £0.00. Then TfL (Transport for London) and Mastercard do a reconcilliation the next day.
If I was travelling in London on these Mondays, I'd use it instead of my Oyster Card.
I feel that they are going about this all wrong. Since there are clear security benefits to using Apple Pay which will result in less financial loss for financial institutions, but only after secure mobile payment systems reach a certain threshold, they need to offer discounts for retailers that use Apple Pay and similar, individual bank-controlled mobile payment systems. Get the retailers paying for terminals with NFC, get the retailers to make sure the firmware is up-to-date so that Apple Pay works, get the retailers to make sure their staff knows all about it, and get the retailers to use their own money to advertise for Apple Pay support and have their employees recommend it at the checkout and you have a setup where the retailer wins, the customer wins, and the financial institution wins. The only ones that don't win are the thieves… but not until we reach that threshold of support and usage.
This is in London. The support system and usage of NFC payments is already there. They're just fighting over who gets to be the default card on Apple Pay.
I know where this is, but it still doesn't change anything I said about lower fees for secure mobile payment that will get the retailers promoting it so we can expedite no longer having to carry physical cards on our person. The US is obviously much further behind since they have much few NFC-capable terminals in place, and of those in place many I've encountered don't have the firmware to make them work with NFC or the retail employees don't even know that NFC works and look at payment with my Apple Watch or iPhone as witchcraft, but the core problem is still everywhere.
I know where this is, but it still doesn't change anything I said about lower fees for secure mobile payment that will get the retailers promoting it so we can expedite no longer having to carry physical cards on our person. The US is obviously much further behind since they have much few NFC-capable terminals in place, and of those in place many I've encountered don't have the firmware to make them work with NFC or the retail employees don't even know that NFC works and look at payment with my Apple Watch or iPhone as witchcraft, but the core problem is still everywhere.
I, for once, agree with the guy. I am surprised that the banks do not offer deeply discounted transaction rates for Apple Pay, given the presumably zero fraud rate (well, almost zero as small amounts will not seek authorization). In the UK, we also need a massive upgrade of NFC terminals, so that we get terminals that are always on, and can accept ApplePay transactions over £30.
I mean, the local newsagent still has to key the amount to be paid into the credit card terminal by hand.....
(Having said that, ApplePay, and even Apple Pay by Watch, seems more and more like a gimmick to me the longer I use it. It just feels increasingly awkward to tap a watch (twisting my arm like I am having a seizure) or a phone (balancing it carefully on my fingertips while a carefully aim for the button with my thumb), rather than a lightweight credit card. I think a Payments Ring would look less embarrassing)
My solution is to offer a 3rd tier for secure mobile payment solutions. We have card present and card not present. You get that low charge because it's seen as card not present, which is stupid considering the security hurdles it takes to add it and security needed to use it. I think this will happen, but I think it will be one of the last things to change due to typical bureaucratic crap.
Doesn't Apple's fee come from the credit card company, or bank, and not directly from the retailer?
Yes.
Can't wait for my subway systems of choice to implement this! The "art of the swipe" get's old, especially when I'm behind some idiot who takes ten tries.....
So the only way Apple could offer a retailer a discount is through that store's credit card.
I've used the Transport for London (TfL) travel card (Oystercard), a regular NFC credit card and Apple Pay and Apple Pay is definitely the slowest to open the ticket gates for the Underground. It may only be a second but it is noticeable.
People in the US will have heard of the "New York Minute"... in London it is the "London second" which is the time before people behind you at Underground ticket gates will start sighing and tutting because you are faffing around taking too long to get through the gates.
I'm not talking about Apple offering anything. I'm talking about the financial institutions 1) offering retailers lower fees when Apple Pay is used (since they are already saving money on lower fraud), and 2) creating a third tier that correctly puts secure mobile payments where they need to be (which is not on-par with card not present payments, but better than card present payments).
How does one briefly allow people to ride for free? Do you let them on for free and then charge them whilst they're on the train?
One sets an expiration date for the offer:
"The promotion is running from Nov. 23 through Dec. 14,"
I've used the Transport for London (TfL) travel card (Oystercard), a regular NFC credit card and Apple Pay and Apple Pay is definitely the slowest to open the ticket gates for the Underground. It may only be a second but it is noticeable.
People in the US will have heard of the "New York Minute"... in London it is the "London second" which is the time before people behind you at Underground ticket gates will start sighing and tutting because you are faffing around taking too long to get through the gates.
And Apple Pay has the highest initial failure rate, which is when the gate does not read the chip correctly, beeps, displays that you need to ask for assistance, and you have to wait an eternity (ie, about 3 seconds), until you can try the Apple Watch again and then it usually works. By this point, you have upset at three old ladies going for coffee, two nannies trying to get the kids to school, and five bankers late for work, all sighing heavily and loudly.
I use Apple Pay on the tube and I lose at least ten minutes of my life every day due to the stress and fear that grips me as I double click on the pill-shaped button and approach the ticket gate.
I misread your original post. Your idea makes sense, but rarely do big corporations do things that make sense. The loss prevention division can't do too good of a job, or they'll find themselves without one.
I'm not talking about Apple offering anything. I'm talking about the financial institutions 1) offering retailers lower fees when Apple Pay is used (since they are already saving money on lower fraud), and 2) creating a third tier that correctly puts secure mobile payments where they need to be (which is not on-par with card not present payments, but better than card present payments).
If you understand how interchange works, there's a ton of tiers already. Merchants are charged a different rate if the card is a plain card, a rewards card, if the card is a rewards card where they spend over $x a month, a business card, a business purchasing card, etc.
https://usa.visa.com/dam/VCOM/download/merchants/visa-usa-interchange-reimbursement-fees.pdf
Big merchants pay the exact rate plus an acquirer markup. Small merchants' transactions are tiered into 3 or 6 rates. Only the smallest (or dumbest) merchants pay one rate.
Further, the acquirer (merchant's bank) and the merchant have certain fraud thresholds that they have to meet. The acquirer will price their markup accordingly. The network can increase the interchange for high-fraud merchants. So the risk is already factored in.
I feel that they are going about this all wrong. Since there are clear security benefits to using Apple Pay which will result in less financial loss for financial institutions, but only after secure mobile payment systems reach a certain threshold, they need to offer discounts for retailers that use Apple Pay and similar, individual bank-controlled mobile payment systems. Get the retailers paying for terminals with NFC, get the retailers to make sure the firmware is up-to-date so that Apple Pay works, get the retailers to make sure their staff knows all about it, and get the retailers to use their own money to advertise for Apple Pay support and have their employees recommend it at the checkout and you have a setup where the retailer wins, the customer wins, and the financial institution wins. The only ones that don't win are the thieves… but not until we reach that threshold of support and usage.
I think you are right about this TBQH!!!