Apple Pay - What are you thoughts

ukoda · 11-09-2014 9:41am #1

while this technically isnt an Apple 'device' it probably still belongs in this forum.

What do people think in general about this? It looks pretty slick from what i can see, no PIN just a tap to pay and fingerprint scan for security.

How long do we think it will take to make it to Ireland (if it ever does) and will it require new hardware from the retailers - or will the existing contactless payment terminals be able to accept them?

godtabh · 11-09-2014 9:50am

it will never be seen here. Irish banks are two conservative. Sure wireless payments barley have a presence here

ukoda · 11-09-2014 9:55am

godtabh wrote: »

it will never be seen here. Irish banks are two conservative. Sure wireless payments barley have a presence here

Yeah true, although contactless is starting to take off now, ive seen it in more and more places:
McDonalds
Spar
Aldi/Lidl
Some Topaz stations
(coming soon to Tesco too - you can see it as an option on the self service screens in all stores, but the hardware isnt updated in them all yet so its greyed out)

I think it will eventually come here, but banks will be slow to do it - but i reckon the payment card companies will push for it?

godtabh · 11-09-2014 9:57am

It used to be (and maybe still is) very difficult to get a credit card machine for a shop. I could see a bank IT manager having a canary trying to figure this out.

Innovation eventually comes to IReland (when it is no longer innovative!)

ukoda · 11-09-2014 9:59am

Also, i have a feeling that Apple themselves will push this very hard - i.e. go directly to the major retailers and get them on board - so the banks may feel the pressure to implement it

BrookieD · 11-09-2014 10:03am

If Irish banks adopt it then it will take off, however they are very slow and too conservative to bring it on board... Saying that as its Apple they might sit up a bit and take notice

Sad Professor · 11-09-2014 12:06pm

Apple will be collecting a fee from banks for every transaction made using Apple Pay - this is necessary in order to run the service. Irish banks will want their own cut as well if only to pay for the cost of implementing it, which I assume would cost a fortune (consultants, bonuses, mistakes, etc - this is Ireland). So if/when it ever comes here I can’t see many people using due to the expense. Even if Apple create an incentive, it’ll be a long time coming. I mean, when are we getting visual voice mail?

ukoda · 11-09-2014 12:58pm

Sad Professor wrote: »

Apple will be collecting a fee from banks for every transaction made using Apple Pay - this is necessary in order to run the service. Irish banks will want their own cut as well if only to pay for the cost of implementing it, which I assume would cost a fortune (consultants, bonuses, mistakes, etc - this is Ireland). So if/when it ever comes here I can’t see many people using due to the expense. Even if Apple create an incentive, it’ll be a long time coming. I mean, when are we getting visual voice mail?

I could see Apple doing this for free or very cheap - in the interest of making their devices even more attractive - one of the things Tim Cook said was that other companies approcahed this area with a view to making a profit from it, and thats why its failed to take off in any sort of real way - but Apple are putting the customer first and designing the user experience - now on saying that, its no real indication of them doing anything for free, but you never know

EDIT: i just read how apple will make their money - they have struck a deal with the major card players to pay apple a per transaction fee to feature their cards on their devices - so it appears Visa, Matercard etc are willing to pay Apple to put their card on iPhones/Watches

I wonder if this will translate to higher transaction charges?

Sad Professor · 11-09-2014 1:08pm

They won’t be offering it for free. Apple don’t do loss-making. I agree they won’t look to profit from it, but they’ll want it to pay for itself. I assume whatever processing fee they look for will end up getting passed on to the retailer.

ukoda · 11-09-2014 1:10pm

Sad Professor wrote: »

They won’t be offering it for free. Apple don’t do loss-making. I agree they won’t look to profit from it, but they’ll want it to pay for itself. I assume whatever processing fee they look for will end up getting passed on to the retailer.

yes correct - i just edited my last post to say:
i just read how apple will make their money - they have struck a deal with the major card players to pay apple a per transaction fee to feature their cards on their devices - so it appears Visa, Matercard etc are willing to pay Apple to put their card on iPhones/Watches

I wonder if this will translate to higher transaction charges?

mad muffin · 11-09-2014 1:23pm

I'd say we will see visual voicemail and an Apple Store in Ireland before we see Apple Pay.

Frank Lee Midere · 11-09-2014 3:24pm

Sad Professor wrote: »

They won’t be offering it for free. Apple don’t do loss-making. I agree they won’t look to profit from it, but they’ll want it to pay for itself. I assume whatever processing fee they look for will end up getting passed on to the retailer.

No. The banks.

dloob · 11-09-2014 3:25pm

I think it has a reasonable chance of showing up at some point because Visa and Mastercard are backing it.
Apple needs to push them to push it on their customer banks.

I don't think the Irish banks are totally adverse to technology a few have rolled out Visa's service for sending money on your phone with an app.
AIB even had an innovative service back in 2001 where you could install an app on your PC that generated single use credit card numbers to use online. They dropped it after a while though.

Frank Lee Midere · 11-09-2014 3:28pm

I am not so pessimistic. Banks make money from credit card transactions. Credit card transactions increase with mobiles using them everywhere. Apple will probably make this real easy for them. Give then the software and say - install that and your done.

Most of the software might be installed with VISA etc. anyway.

Frank Lee Midere · 11-09-2014 3:35pm

Here is how VISA works.

http://bmimatters.com/2012/03/19/understanding-visa-business-model/

Tl:dr VISA really supplies the technology between the card owner, merchant, and bank. Since VISA agree to Apples system then Apple will get a cut in that link ( from the merchants fee no doubt) and VISA hope to make it up on volume. Apple just need to break even.

So it would be visa (etc) who really need to be in board and they are. The banks don't have to do anything except what they are doing - checking account balances on the authorisation request from the card company, and debiting the customers accounts every month or so. Can't see them complaining.

Frank Lee Midere · 11-09-2014 3:46pm

So more info. It looks like there needs to be a dedicated retail device for this.

1) the iPhone queries the device which might be a scanner. Sends no credit card details.
2) merchant device says tree fiddy DOLLAH.
3) iPhone has credit card details so talks to VISA says "can this bozo afford $350, here's the credentials." There is an extra field saying "from Apple". Apple probably record this too.
4) VISA does what it does. Apple doesn't get involved.
5) sale goes through. 2.5% goes to VISA.
6) every Q Apple says - there were $x M worth of transactions from the iPhone, give me 10% of the 2.5%.

Banks not involved.

ukoda · 12-09-2014 9:44am

Frank Lee Midere wrote: »

So more info. It looks like there needs to be a dedicated retail device for this.

1) the iPhone queries the device which might be a scanner. Sends no credit card details.
2) merchant device says tree fiddy DOLLAH.
3) iPhone has credit card details so talks to VISA says "can this bozo afford $350, here's the credentials." There is an extra field saying "from Apple". Apple probably record this too.
4) VISA does what it does. Apple doesn't get involved.
5) sale goes through. 2.5% goes to VISA.
6) every Q Apple says - there were $x M worth of transactions from the iPhone, give me 10% of the 2.5%.

Banks not involved.

it is interesting that Visa / MasterCard etc are dealing directly with Apple for revenue

Visa and Mastercard don't actually set the transaction charges for the retailers (thats between the merchant card service provider and the retailer) so this may not actually have an impact on transaction charges at all

Mantis Toboggan · 13-09-2014 9:09am

Don't think this tech will take off for a few years yet. There's a few flaws with this system which will hold it back. Whatever about the US, I cannot ever see it taking off in Ireland and becoming as widely used as credit cards are now.

ukoda · 13-09-2014 10:12am

Buddy Holly wrote: »

Don't think this tech will take off for a few years yet. There's a few flaws with this system which will hold it .

What do you think is flawed in it?

shanec1928 · 13-09-2014 10:28am

Buddy Holly wrote: »

Don't think this tech will take off for a few years yet. There's a few flaws with this system which will hold it back. Whatever about the US, I cannot ever see it taking off in Ireland and becoming as widely used as credit cards are now.

It will take off. From 2015 all American shops who provide credit card facilities have to upgrade to chip and pin. So people will be getting new machines. Perfect timing to release this and with the major banks on board it will take off.

Dudda · 13-09-2014 11:37am

shanec1928 wrote: »

It will take off. From 2015 all American shops who provide credit card facilities have to upgrade to chip and pin. So people will be getting new machines. Perfect timing to release this and with the major banks on board it will take off.

I don't know what this "dedicated retail device" mentioned above is but if it can only be used by Apple phones (roughly 50% of the US market) and if a competitor supports 80-90% (eg Android and iOS) they have a stronger chance. It would be very very hard for a small retailer to get a pay terminal/device that they know will only support half their customers and another device for the other half.

ukoda · 13-09-2014 11:42am

Dudda wrote: »

I don't know what this "dedicated retail device" mentioned above is but if it can only be used by Apple phones (roughly 50% of the US market) and if a competitor supports 80-90% (eg Android and iOS) they have a stronger chance. It would be very very hard for a small retailer to get a pay terminal/device that they know will only support half their customers and another device for the other half.

Nah, Apple have already said it will work with all NFC terminals, it's just a piece of software that's needed to decrypt the info from Apple devices. There's no way Apple would do this and require a standalone terminal just for their product. At the end of the day NFC is NFC it works with all card types and all banks support it, it's just the processing software I'd imagine needs upgrading (and the hardware too if it's not already NFC enabled, but they'd have to do this anyway for the normal contactless payments all banks now offer)

murpho999 · 13-09-2014 11:48am

Buddy Holly wrote: »

Don't think this tech will take off for a few years yet. There's a few flaws with this system which will hold it back. Whatever about the US, I cannot ever see it taking off in Ireland and becoming as widely used as credit cards are now.

Why are people saying it won't take off and what flaws do you know about?

Also see other comments that Irish banks wouldn't go for this but US would.

I have found Irish banking systems somewhat better than others, for example cheques still huge in the US for payments whereas electronic more popular here.

Even in personal bankng it's been possible to change your own ATM card PIN and I couldn't do that when I lived in the Netherlands. Also CHip and pin been introduced ahead of pother countries too.

Truth of the matter is that if the banks see it can work and there's profits to be made as it will lead to more transactions then they will get behind it and it will take off.

Mantis Toboggan · 13-09-2014 12:17pm

ukoda wrote: »

What do you think is flawed in it?

Well, it requires a standalone device to process the payments which apparently is expensive. The expensive product will be at the cost of the retailer. Smaller retailers won't bother installing them as there's no financial benefit to them doing so. It's as easy to whip out your card to pay for something as it is to whip out your phone. Also, it doesn't benefit apple financially so they're not going to be too concerned about pushing it further. In the US best buy trialled this but eventually gave up as it simply didn't work and refused to sign up this time around. No doubt apple will make a good fist of it but I'd say it will be years before it comes as commonplace as payment cards.

ukoda · 13-09-2014 12:27pm

Buddy Holly wrote: »

Well, it requires a standalone device to process the payments which apparently is expensive. The expensive product will be at the cost of the retailer. Smaller retailers won't bother installing them as there's no financial benefit to them doing so. It's as easy to whip out your card to pay for something as it is to whip out your phone. Also, it doesn't benefit apple financially so they're not going to be too concerned about pushing it further. In the US best buy trialled this but eventually gave up as it simply didn't work and refused to sign up this time around. No doubt apple will make a good fist of it but I'd say it will be years before it comes as commonplace as payment cards.

Well it doesn't necessarily require a standalone terminal device at all. Just an NFC enabled one, which are becoming more and more common place in Ireland now anyway, as we now all have contactless enabled cards

The money is in it for Apple as visa / MasterCard and AmEx have all agreed to cut apple in on every transaction using apple pay

Best Buy never trailed Apple pay, they trailed other contactless payments, but with the backing of Apple and all major card issuers plus all the major banks, I can't see how they wouldn't implement it this time

Mantis Toboggan · 13-09-2014 12:38pm

Dudda wrote: »

I don't know what this "dedicated retail device" mentioned above is but if it can only be used by Apple phones (roughly 50% of the US market) and if a competitor supports 80-90% (eg Android and iOS) they have a stronger chance. It would be very very hard for a small retailer to get a pay terminal/device that they know will only support half their customers and another device for the other half.

Also while ios may have a 50% market share in the US, they will need either an iPhone 6 or 6 plus, further reducing the amount of people who can use apple pay. Not getting wallmart on board could come back to bite them.

Dudda · 13-09-2014 12:46pm

Buddy Holly wrote: »

Also while ios may have a 50% market share in the US, they will need either an iPhone 6 or 6 plus, further reducing the amount of people who can use apple pay. Not getting wallmart on board could come back to bite them.

Oh really? So the iPhone 5S will support the Apple Watch but not Apple Pay? I'm sure Apple has valid security reasons but that really does reduce further the amount of people that can use it.

dloob · 13-09-2014 1:05pm

Visa Europe will roll out Apple Pay next year.
http://www.v3.co.uk/v3-uk/news/2364539/visa-to-roll-out-apple-pay-across-europe-in-2015

Both Visa and Mastercard are moving to requiring NFC support in the terminals.
With Mastercard from 2016 any new terminal must support NFC and from 2020 they will no longer allow non NFC terminals to accept their cards.
Mastercard

Bang_Bang · 13-09-2014 1:34pm

dloob wrote: »

Visa Europe will roll out Apple Pay next year.
http://www.v3.co.uk/v3-uk/news/2364539/visa-to-roll-out-apple-pay-across-europe-in-2015

Both Visa and Mastercard are moving to requiring NFC support in the terminals.
With Mastercard from 2016 any new terminal must support NFC and from 2020 they will no longer allow non NFC terminals to accept their cards.
Mastercard

So that's the answer, we will adopt when we are pushed into it in 2020.

Mantis Toboggan · 13-09-2014 1:39pm

Dudda wrote: »

Oh really? So the iPhone 5S will support the Apple Watch but not Apple Pay? I'm sure Apple has valid security reasons but that really does reduce further the amount of people that can use it.

Well there's no NFC chip in any iPhone before the 6.

Frank Lee Midere · 13-09-2014 1:45pm

Buddy Holly wrote: »

Also while ios may have a 50% market share in the US, they will need either an iPhone 6 or 6 plus, further reducing the amount of people who can use apple pay. Not getting wallmart on board could come back to bite them.

They might be more concerned about the actual spending power if that 50% as well though.

You are swimming around for excuses. If the NFC contactless phones just need extra software that's going to a no brainer as the Americans say.

Inquitus · 13-09-2014 3:58pm

It's all good any NFC terminal supports any NFC payment method, so when implemented they will support both Google wallet and Apple Pay, which is obviously a good thing for us in Europe where Android market share is around 75%, without cross compatibility Apple Pay would be irrelevant here.

Frank Lee Midere · 13-09-2014 4:00pm

Inquitus wrote: »

It's all good any NFC terminal supports any NFC payment method, so when implemented they will support both Google wallet and Apple Pay, which is obviously a good thing for us in Europe where Android market share is around 75%, without cross compatibility Apple Pay would be irrelevant here.

Google wallet depends on the manufacturers caring enough to implement it.

elderlemon · 13-09-2014 7:55pm

If this is proprietary to Apple (which I believe it is) and has the potential to lock others (Google at al, Microsoft etc) out of the market by signing up retailers, then I can see this being stopped dead in it's tracks in Europe.

Just a thought.

ukoda · 13-09-2014 7:58pm

elderlemon wrote: »

If this is proprietary to Apple (which I believe it is) and has the potential to lock others (Google at al, Microsoft etc) out of the market by signing up retailers, then I can see this being stopped dead in it's tracks in Europe.

Just a thought.

Well Apple Pay is propriety to Apple, but there's nothing stopping anyone else doing it for android etc. as we've discussed NFC is available to any card issuer / bank / retailer

And by the way, there's already a competitor with google wallet

It certainly won't stop dead in Europe as all the major cards are backing it

elderlemon · 13-09-2014 8:04pm

But this is not just NFC. Yes it uses NFC to initiate the handshake but there is more going on between Apple and the card issuers. Also I believe it requires a new terminal (not just any old NFC enabled terminal).

We'll find out more over the coming months but my initial feeling on this is that it locks out competitors by having contracts between the card issuer, the retailer and Apple. This is very different from how Google Wallet and other systems work and could be seen as locking out others from the retailer and therefore anti-competitive.

We'll see but I wouldn't be surprised.

ukoda wrote: »

Well Apple Pay is propriety to Apple, but there's nothing stopping anyone else doing it for android etc. as we've discussed NFC is available to any card issuer / bank / retailer

And by the way, there's already a competitor with google wallet

It certainly won't stop dead in Europe as all the major cards are backing it

ukoda · 13-09-2014 8:55pm

elderlemon wrote: »

But this is not just NFC. Yes it uses NFC to initiate the handshake but there is more going on between Apple and the card issuers. Also I believe it requires a new terminal (not just any old NFC enabled terminal).

We'll find out more over the coming months but my initial feeling on this is that it locks out competitors by having contracts between the card issuer, the retailer and Apple. This is very different from how Google Wallet and other systems work and could be seen as locking out others from the retailer and therefore anti-competitive.

We'll see but I wouldn't be surprised.

No it doesn't lock out anyone else and does not need any special type of terminal, just the normal terminal that we currently have that are NFC enabled, have a read of the articles posted above, it uses normal NFC terminals, which like I say, anyone can use

There's no exclusivity here, the card issuers would never agree to solely support apple devices, plus their own cards have NFC chips that will still work as normal, so it's the one terminal

All Apple is doing is routing the transaction through its payment service, same thing google do with google wallet.

challengemaster · 13-09-2014 11:13pm

godtabh wrote: »

it will never be seen here. Irish banks are two conservative. Sure wireless payments barley have a presence here

You'd be surprised - most of my day to day transactions now are contactless payments.

Buddy Holly wrote: »

Also while ios may have a 50% market share in the US, they will need either an iPhone 6 or 6 plus, further reducing the amount of people who can use apple pay. Not getting wallmart on board could come back to bite them.

The difference in the US is that a lot of schemes are in place so people are continually upgrading their (luxury) assets, such as phones and cars. There's a mentality about always having the newest, apart from the framework is there to support it. Plenty of US cars are on finance, and every 2nd year they get upgraded and re-financed - and that's the system they work on. I'd assume similar things exist for phones on contract, after 12 months they get early upgrades or whatever. I'd say the majority of the iOS share will be upgrading.

DubDJ · 14-09-2014 2:15am

A few things I've picked up on this as there's seems to be a general confusion.

Apple are getting a fee from this service, supposedly 0.15%. The service works over NFC so current terminals are supposed to work but will most likely require a firmware update to support Apple's system. I think this is probably down to the way ApplePay works, relating to the secure token the Apple service uses. Also the iPhone 5, 5c and 5s will work with the service as long as you have it paired with the upcoming Apple watch.

Also good to see from the article above that it will be coming to Europe soon, and as I mentioned retailers here should be able to update existing terminals to support it.

One thing I'm curious about, will the app support of ApplePay work at launch. Eg paying for eBay items with the 'pay with ApplePay' button. I don't see a reason not, it says visa and MasterCard are supported but then goes on to list supporting banks, maybe it won't work because of the whole secure token thing but I'm not sure.

challengemaster · 14-09-2014 2:35am

DubDJ wrote: »

One thing I'm curious about, will the app support of ApplePay work at launch. Eg paying for eBay items with the 'pay with ApplePay' button. I don't see a reason not, it says visa and MasterCard are supported but then goes on to list supporting banks, maybe it won't work because of the whole secure token thing but I'm not sure.

I'd say app support will possibly require an app update, but for major brands Apple have got on their side - it seems new apps have already been in development for a while.

The supporting banks thing I'd imagine is relating to how the cards get added, more specifically verified.

DubDJ · 14-09-2014 2:50am

challengemaster wrote: »

I'd say app support will possibly require an app update, but for major brands Apple have got on their side - it seems new apps have already been in development for a while.

The supporting banks thing I'd imagine is relating to how the cards get added, more specifically verified.

Yeah but for the partners Apple used for the demo, I wonder will an Irish visa debit or even a credit card work. Will you be able to add your own card to passbook and pay with it, until NFC gets the support for ApplePay. Or maybe the whole token system Apple uses will need to be supported by Irish banks for this too.

challengemaster · 14-09-2014 2:59am

I've a feeling there'll be some workaround - seeing as it works via passbook, and you can use the card you've got registered on iTunes. I reckon if you have a card added that way it'll be a valid work around until local banks add support, because they don't need to verify that card.

Rock of Gibraltar · 14-09-2014 2:15pm

I think this could be rolled out quite quickly here, possibly quicker than in the States given NFC is more widespread here and already growing rapidly.
For example this NFC vending machine in UCD.

There's also an ongoing government strategy to move to more cashless society, as of this month the government no longer accepts cheques.
I'm not sure why people think it's necessary for Irish banks to be on-board with Apple Pay and NFC payments, they don't really have a role in NFC transactions. Visa and Mastercard are the technology behind NFC not banks. It is necessary for Visa and Mastercard for this to take off here which it appears they've already committed to this.
Tim Cook didn't get up an say we've Bank of America etc signed up, he spoke about the payment service companies Mastercard, Visa, American Express etc.

challengemaster · 14-09-2014 2:19pm

Rock of Gibraltar wrote: »

I'm not sure why people think it's necessary for Irish banks to be on-board with Apple Pay and NFC payments, they don't really have a role in NFC transactions. Visa and Mastercard are the technology behind NFC not banks. It is necessary for Visa and Mastercard for this to take off here which it appears they've already committed to this.
Tim Cook didn't get up an say we've Bank of America etc signed up, he spoke about the payment service companies Mastercard, Visa, American Express etc.

The validation process where Apple verifies the card you add to passbook is actually yours. This requires the banks cooperating with Apple and dealing with them rather than the end user. Without that, you can't add cards to passbook to use with Apple Pay - rendering the service useless.

ukoda · 14-09-2014 2:21pm

Rock of Gibraltar wrote: »

Tim Cook didn't get up an say we've Bank of America etc signed up, he spoke about the payment service companies Mastercard, Visa, American Express etc.

well actually he did, he listed the 5 major US banks who are already on board and that another 5 are coming soon.

Although the major players are the card companies, the banks have to process the transactions so they do have a role to play - altho I'm sure they'll quickly come on board when the likes of Visa / MasterCard etc are pushing for it

ukoda · 14-09-2014 2:28pm

Interesting article here

basically saying the credit card companies will not look to increase transaction charges on Apple Pay - and that it may actually lead to reduced charges as its more secure (so reducing money spent on fraud prevention and payouts)

Apple Pay - What are you thoughts

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