Apple Pay agreements with credit card companies, banks up for renewal this year

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in General Discussion
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.
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Comments

  • Reply 1 of 22
    Kind of depressing that some banks' three-year contracts are coming up already, yet my company's credit union still has not announced any plans of supporting it at all, ever.
  • Reply 2 of 22
    rob53rob53 Posts: 2,087member
    I am finally seeing more businesses in my town and surrounding area not only accept ApplePay but (almost) understand how (and that) it works. Even so, there are iPhone users who haven't the faintest idea what it is. I was at a Red Robin and the wait staff, a younger person probably in her mid to late twenties, didn't know what ApplePay was even though she has an iPhone 6. Of course, Red Robin uses their POS self-service station at each table (at least in the bar--I have ice tea) which doesn't take ApplePay, but she sounded interested so I left the URL for ApplePay so she could investigate it. I see TV ads for ApplePay but Apple's advertising just isn't reaching a lot of people. Nobody else in my immediate family uses it and I don't believe they even use TouchID and they all have an iPhone 6 or iPhone 6S. They see me use it but just don't have the "time" to figure it out. 

    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. 
    watto_cobra
  • Reply 3 of 22
    rob53rob53 Posts: 2,087member
    Kind of depressing that some banks' three-year contracts are coming up already, yet my company's credit union still has not announced any plans of supporting it at all, ever.
    I would like to hear from Apple on exactly how much it costs, both in money and configuration time, for a bank/credit union to have its credit/debit card supported by Apple Pay. I wonder if there are financial institutions who Apple does not accept because of ????? Some more transparency on Apple's part would be helpful in determining why your credit union (don't believe my old credit union is supported either) isn't on the list. Maybe one of the AI editors could take some time and investigate this process and see what's going on so we can lay the blame on the right company.
  • Reply 4 of 22
    It's a funny piece of myopia, when the author's personal anecdote is projected out as if it's the experience and reality for everyone. It's not, and that's evidenced by the utterly significant surge in ApplePay transactions over the last year. Certainly the USA is a slower adopter, but that is due to the weaker penetration of wireless payment terminals - a slowness that is unique to the USA.
    lostkiwiwatto_cobra
  • Reply 5 of 22
    ktappektappe Posts: 771member
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    lostkiwi
  • Reply 6 of 22
    It seems more banks support it than merchants. Although growing, there's just not that many merchants that support contactless payments yet. We need more merchants, retailers to support it. I've used Apple Pay a lot more over the past year but it's a little less than half of the places I go shop. 
  • Reply 7 of 22
    DonvermoDonvermo Posts: 61member
    I would gladly use Apple pay if it was even available in my country. Most European countries do not have support for this feature yet and I would not be surprised that this is skewing the statistics on usage among iPhone users.
  • Reply 8 of 22
    SpamSandwichSpamSandwich Posts: 31,417member
    ktappe said:
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    Try PopMoney.com. They have an app and the whole thing is very easy to set up and use.
    edited April 2017
  • Reply 9 of 22
    boltsfan17boltsfan17 Posts: 2,184member
    ktappe said:
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    It sounds like the banks you use are behind the times. Every bank I've ever used has the ability to transfer money to anyone online. My current bank, I can log into my account and transfer money to someone at the same bank or any other bank. 
  • Reply 10 of 22
    boltsfan17boltsfan17 Posts: 2,184member

    It's a funny piece of myopia, when the author's personal anecdote is projected out as if it's the experience and reality for everyone. It's not, and that's evidenced by the utterly significant surge in ApplePay transactions over the last year. Certainly the USA is a slower adopter, but that is due to the weaker penetration of wireless payment terminals - a slowness that is unique to the USA.
    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. 
  • Reply 11 of 22
    In the last 6 months or so, I've seen a big increase in merchants that I do business with accepting Apple Pay.  Now, most of the grocery stores, liquor stores, auto parts stores, etc., are using it.  Restaurants are slower to adopt Apple Pay, but I think that's because they don't yet have devices that can be used at the table (although there's no reason why they can't bring a Square/iPad combo to the table).
    lostkiwi
  • Reply 12 of 22
    wlymwlym Posts: 95member
    I'm old enough to remember credit card purchases requiring filling out by hand and those carbon copy machines. Paying with a double click on my Apple Watch makes me smile every time.
  • Reply 13 of 22
    anantksundaramanantksundaram Posts: 19,387member
    ApplePay is brilliant. It should be a blockbuster service, but sadly, it's not. Apple's doing an utterly poor, sucky job of marketing it, or taking it to the next level. The company should have bought Square -- it still could -- or produced a similar product, given it away at-cost to retailers, and and made money on the transaction fees. It would not only dovetail with Apple's traditional strengths in hardware, but also burnish its fast-growing services business credentials.
    edited April 2017
  • Reply 14 of 22
    JinTechJinTech Posts: 394member
    I can't wait when ApplePay comes to public transit in the San Francisco Bay Area.
    lostkiwi
  • Reply 15 of 22
    brucemcbrucemc Posts: 1,540member
    ktappe said:
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    Not sure if that is a result of smaller banks or not.  Here in Canada, we have had online (which really means communication means is email) money transfers amongst the largest banks (anyone part of the Interac system) for years.  I do more way more email money transfers than cheques, bank drafts, etc.

    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.
  • Reply 16 of 22
    brucemcbrucemc Posts: 1,540member
    ktappe said:
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    Not sure if that is a result of smaller banks or not.  Here in Canada, we have had online (which really means communication means is email) money transfers amongst the largest banks (anyone part of the Interac system) for years.  I do more way more email money transfers than cheques, bank drafts, etc.

    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.
  • Reply 17 of 22
    gatorguygatorguy Posts: 21,117member
    rob53 said:
    Kind of depressing that some banks' three-year contracts are coming up already, yet my company's credit union still has not announced any plans of supporting it at all, ever.
    I would like to hear from Apple on exactly how much it costs, both in money and configuration time, for a bank/credit union to have its credit/debit card supported by Apple Pay. I wonder if there are financial institutions who Apple does not accept because of ????? Some more transparency on Apple's part would be helpful in determining why your credit union (don't believe my old credit union is supported either) isn't on the list. Maybe one of the AI editors could take some time and investigate this process and see what's going on so we can lay the blame on the right company.
    I think it's more up to whether a credit union or bank wants to be part of Apple Pay rather than Apple alone making the decision. 

    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. 
    edited April 2017
  • Reply 18 of 22
    Kind of depressing that some banks' three-year contracts are coming up already, yet my company's credit union still has not announced any plans of supporting it at all, ever.
    Change credit unions or dump their credit card (explaining to them why) and get a non bank (or Costco) issued card (you will likely get a better reward program too). 
  • Reply 19 of 22
    brucemc said:
    ktappe said:
     weaker penetration of wireless payment terminals - a slowness that is unique to the USA.

    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.
    Not sure if that is a result of smaller banks or not.  Here in Canada, we have had online (which really means communication means is email) money transfers amongst the largest banks (anyone part of the Interac system) for years.  I do more way more email money transfers than cheques, bank drafts, etc.

    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.
    Folks in a high NFC POS install rate like 🍁Canada carrying an iPhone who normally pay with a card of some type but not via Apple Pay are doing payments all wrong and might be a little dim. 
  • Reply 20 of 22
    fearlessfearless Posts: 138member
    I use Apple Pay daily - maybe 3 times if it's a tre-ristretti day. Ups to ANZ for breaking ranks with its fellow Australian banking cabal and backing Apple Pay, yet paying for stuff with my Watch at ubiquitous contactless terminals (Paywave aka Tap-N-Go) remains a novelty for most in retail. Party trick, which is odd given the brisk trade in Watches... maybe not here. Could do with an Apple Store in NZ - that'd sort it!
    edited April 2017
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