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Friday 12 September 2014

Apple Pay pays off for Apple





A report suggests that Apple may make as much as 0.0015% of every transaction handled through Apple Pay, a new payments platform that was introduced alongside the iPhone 6 and iPhone 6 Plus. This means that through Apple Pay, like the App Store, Apple has found another venue to earn additional revenue on top of iPhone hardware sales.


Through Apple Pay, Apple can generate as much as 15 cents for every $100 that Apple Pay handles. And since banks and card issuers are at the center of the Apple Pay experience with Apple being the conduit and not a rival, banks are said to be paying Apple for the privilege of being on the platform:



They are also paying hard cash for the privilege of being involved: 15 cents of a $100 purchase will go to the iPhone maker, according to two people familiar with the terms of the agreement, which are not public. That is an unprecedented deal, giving Apple a share of the payments' economics that rivals such as Google do not get for their services.



Another reason why financial institutions are jumping onboard is that Apple Pay is secure with cryptograms, Dynamic Account Numbers, and tokens alongside security of Touch ID.



Given that many retailers will have to update their payment processing terminals for the EMV chip cards next year, many of those terminals will also support NFC payments. This makes the timing just right for Apple to enter the NFC market with its Apple Pay standard, even if retailers aren't explicit partners that will support Apple Pay as many of those terminals should be able to handle iPhone payments via NFC.


Via: MacRumors
























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