Mikey Campbell
Details of Apple's upcoming Apple Pay mobile payments system are starting to emerge, with a report on Friday claiming the company will garner 15 cents on a $100 purchase, more than Google managed for its Google Wallet initiative.
According to sources familiar with Apple's banking and credit card arrangements, Cupertino will get a 0.15 percent cut of every Apple Pay transaction conducted over NFC, the Financial Times reports.
The new information adds to a previous report that noted Apple will collect fees from banks for customer purchases. What those fees were, exactly, was unknown at the time.
In an in-depth overview of Apple Pay published yesterday, it was reported that Apple's banking and credit card network partners are willing to offer lower per-transaction fees thanks in large part to the technology's integration. For example, despite being a "no card present" touch-less solution, Apple Pay will be charged at rates below even "card present" tiers, a major discount competing wireless payment makers were unable to secure.
Part of the reasoning behind the move is that Apple's system does not infringe on traditional credit card payments networks, unlike some other programs backed by major retailers. In lieu of higher transaction fees, banks are supposedly looking to make up the difference through sheer volume driven by — hopefully rapid — Apple Pay adoption. Instead of paying with cash, consumers may switch to Apple's system.
Further, Apple's payments solution is tokenized, meaning card numbers and other sensitive information is replaced with generated codes. The system is thought to be more secure than swip-to-pay methods.
Apple Pay will be available on iPhone 6 and iPhone 6 Plus handsets, as well as the upcoming Apple Watch.
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38 Comments
.0015% is not 15 cents of $100
.0015% would be 15 cents for every 10,000
This certainly answers more questions. Apple is getting paid without having to get into the merchant processor business, very smart move on their part. These keeps everyone pockets lined without Apple stomping on anyways toes by getting doing merchant processing themselves.
[quote name="AppleInsider" url="/t/182266/apple-to-reportedly-net-15-cents-for-every-100-apple-pay-transaction#post_2597357"] Further, Apple's payments solution is tokenized, meaning card numbers and other sensitive information is replaced with generated codes. The system is thought to be more secure than swip-to-pay methods.[/quote] ApplePay is inherently more secure than using a physical card. Here's why. Credit card number/information is not stored anywhere on your iPhone. Not. Stored. Anywhere. When you take a picture of one of your credit cards, the information on it is used to communicate with your card provider, which then issues a token representing that card. The token is sent back to your iPhone. The token is what is stored in the secure element on the iPhone along with just the generic type of card it is associated with (VISA, MasterCard, whatever) and the credit information and image of your actual credit card are then deleted. None of your sensitive credit card information is stored on your iPhone. When you use ApplePay, the tokens in your iPhone are accessed to present a list of the cards you have available to pay with. Just generic images of each card. You pick one, or, if you've established a default and that's the one you intend to pay with, you can skip that step. You hold your phone near the NFC reader and touch the Touch ID on the phone. The phone generates a one-time use payment token from the token representing your selected credit card. This one-time use payment token, using Public Key encryption technology, can be decrypted only by the credit card issuer, which holds the private key used to decrypt it. Presumably, the public key token incorporates the exact amount of the charge and the business being credited with the charge. That way, even if this token is intercepted, it cannot be used twice and can be used by a thief only to charge the purchase you are standing at the register and in physical possession of. No way for a thief to gain from the use of the intercepted information. None of your sensitive credit card information is transmitted during a transaction. After the charge has been approved by the card issuer/bank, a confirmation of such is sent back to the business so that you are allowed to complete your transaction at the register, receive a receipt and leave the business with your goods/services. The business retains only a record of which type of card was used to complete the transaction, not even your name or card number, etc. If the business' systems are later compromised, such as what occurred with Home Depot, Target, others, card information may be stolen associated with those who swiped their physical credit cards at the same registers you and other ApplePay users used, but your card information and that of those other ApplePay users will not be stolen because it will simply never have existed in the business' systems. None of your sensitive credit card information is stored by any business you purchase from. So ApplePay is inherently more secure. Your credit card information is not stored in the dozens, or hundreds, of businesses you've made purchases from. Can thieves still get hold of your credit card information? Of course, either by stealing the actual card from you or by breaking into your card issuer's systems. These methods have existed and will still exist, but gone will be the days of restaurant staff lifting an imprint or, in the modern era, snapping a pic of your card with their smartphone. Gone are the days of your information being compromised due to a break in of the systems of a store at which you made one or more purchases. Gone are the days of your information being lifted by scanners secretly inserted into gas pumps, etc. Perfectly secure? Never. Inherently more secure in several fundamental ways? Absolutely.
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.