Apple Pay agreements with credit card companies, banks up for renewal this year
This year could prove to be pivotal for Apple Pay in a number of ways, including adoption and merchant availability, but also in support from card issuers, many of which have contracts with Apple up for renewal.
Apple is set to negotiate extensions of three-year deals with credit card companies and banks, according to The Wall Street Journal.
The report features quotes from Apple services chief Eddy Cue, who expressed confidence that financial institutions will re-up with Apple Pay due to continued growth of the contactless payment method.
The report attempts to portray adoption of Apple Pay as "disappointing," though comments from Cue suggest the company is in no rush, as long as adoption remains steady.
"Does it matter if we get there in two years, three years (or) five years?" he asked. "Ultimately, no."
It's estimated that just 13 percent of iPhone users have tried Apple Pay, with barriers ranging from merchant availability to user reluctance with new technology. Still, research also suggests users are twice as likely to have tried Apple Pay as opposed to rivals like Samsung Pay or Android Pay.
The Journal also cited David Robertson of Nilson Report, who believes that a tipping point for Apple Pay could be imminent. Currently, it's estimated that about one third of U.S. retailers support the NFC-based payment service.
Apple has been steadily adding new institutions to Apple Pay since its debut in late 2014, including more than 20 banks this week alone. International expansion has also progressed, with its debut in Taiwan last week, and arrival in Italy expected soon.
Major U.S. banks are also coming around to Apple Pay support for ATM withdrawals, as Wells Fargo revealed last week that it will add support later this year, joining Bank of America's "select" compatible ATMs.
Statistics released in February indicated that 36 percent of U.S. merchants accept Apple Pay, making it the most common mobile payment platform. The data from Boston Retail Partners suggests adoption was up considerably from just 16 percent of retailers a year prior. Android Pay came in at 24 percent, and Samsung Pay at 18 percent, though the latter can be used at businesses that don't officially support the platform.
In the company's most recent quarterly earnings call, Apple indicated that Apple Pay transactions were up 500 percent year-over-year in the December quarter, driven by triple the number of users.
Apple is set to negotiate extensions of three-year deals with credit card companies and banks, according to The Wall Street Journal.
The report features quotes from Apple services chief Eddy Cue, who expressed confidence that financial institutions will re-up with Apple Pay due to continued growth of the contactless payment method.
The report attempts to portray adoption of Apple Pay as "disappointing," though comments from Cue suggest the company is in no rush, as long as adoption remains steady.
"Does it matter if we get there in two years, three years (or) five years?" he asked. "Ultimately, no."
It's estimated that just 13 percent of iPhone users have tried Apple Pay, with barriers ranging from merchant availability to user reluctance with new technology. Still, research also suggests users are twice as likely to have tried Apple Pay as opposed to rivals like Samsung Pay or Android Pay.
The Journal also cited David Robertson of Nilson Report, who believes that a tipping point for Apple Pay could be imminent. Currently, it's estimated that about one third of U.S. retailers support the NFC-based payment service.
Apple has been steadily adding new institutions to Apple Pay since its debut in late 2014, including more than 20 banks this week alone. International expansion has also progressed, with its debut in Taiwan last week, and arrival in Italy expected soon.
Major U.S. banks are also coming around to Apple Pay support for ATM withdrawals, as Wells Fargo revealed last week that it will add support later this year, joining Bank of America's "select" compatible ATMs.
Statistics released in February indicated that 36 percent of U.S. merchants accept Apple Pay, making it the most common mobile payment platform. The data from Boston Retail Partners suggests adoption was up considerably from just 16 percent of retailers a year prior. Android Pay came in at 24 percent, and Samsung Pay at 18 percent, though the latter can be used at businesses that don't officially support the platform.
In the company's most recent quarterly earnings call, Apple indicated that Apple Pay transactions were up 500 percent year-over-year in the December quarter, driven by triple the number of users.
Comments
As for Wells Fargo's use of ApplePay at the ATM, they aren't using ApplePay because ApplePay isn't used for bank transactions only for paying for a purchase. This in itself shows that businesses don't really understand what ApplePay or TouchID really is. I would hope Wells Fargo and BofA actually discuss these things with Apple before dumping a stupid implementation onto customers.
Indeed. The U.S. banking system lags badly behind the rest of the world. U.S. banks are stuck in 1950. A couple days ago I wanted to transfer $75 to a neighbor who I owed. He and I both have M&T bank accounts. Yet M&T told me there is no way to transfer those funds from my account to his despite me having both bank account #'s. They said the only way they could do it is if I set him up in my account's Bill Pay and if I did, they would literally cut him a paper check. From M&T to M&T. Then I called my credit union. They too said there was no way for them to e-transfer funds to his (different) credit union account. For some reason Americans are just willing to accept this dark ages banking system. I eagerly await these new e-payment startups eating the decrepit big banks for lunch.
I think the biggest issue is NFC isn't turned on at payment terminals. With the USA finally getting on board with chip cards, all the new chip terminals accept wireless payments. Problem I see is a lot of these stores don't have NFC turned on. I've been to several that have new chip card terminals, even with an Apple Pay logo. They wouldn't work since the terminals were set up to only accept physical cards.
Apple Pay is extremely convenient here - most places now take it for amounts under $100 - although I rarely see anyone other than myself use it. Whenever I use my Apple Watch to pay, I almost always hear "I have seen payments with the phone a few times, but never with a watch". For whatever reason, most people don't have it setup on their phones, even though majority of iPhones used have it supported.
Apple Pay is extremely convenient here - most places now take it for amounts under $100 - although I rarely see anyone other than myself use it. Whenever I use my Apple Watch to pay, I almost always hear "I have seen payments with the phone a few times, but never with a watch". For whatever reason, most people don't have it setup on their phones, even though majority of iPhones used have it supported.
There's a rather distinct possibility that Apple may not continue getting the same cut of the interchange fee that they were able to initially negotiate. Possible they may not get any cut at all tho with Apple's big 'ol sledgehammer in hand I would guess they'l,l wrangle something.
On the processing side there is no longer anything unique that Apple brings to the table. Those procedures and security safeguards are now mandated by the payment industry, (AKA Visa/Mastercard) as part of a standard that all mobile payment providers must adhere to. The only uniquely Apple part of it is pre-installed Apple Pay software on iPhones and whatever marketing commitment Apple makes to promote the service. Otherwise Apple Pay and Android Pay and Samsung Pay and Whatever Pay provide the same security and processing. Nothing is needed on that side from Apple that the others don't also provide.