Apple added such a clause in their contracts with the banks. They didn't want the merchants to get charged more when they use Apple Pay, because they know it would mean the death of their payment method.
They negotiated on the premise of what they can charge, period. That fee will end up being passed on to the consumer. If there was a cost saving (less fraud), then they wouldn't need to add a clause to the contract forbidding banks and merchants to charge more for Apple Pay.
There is no such law. You read me wrong. Apple and the banks forbids the merchants from charging more for credit cards. That should be outlawed, the merchants should be free to do that if they want to. This way, they could charge more for Apple Pay and see who is in.
So when the online merchant ask for the expiration date, what do I enter if I want to use Apple Pay? I'm sure a camera can get you entering the pin on your phone just like on terminals.
It does. But once you get rid of the legacy magnetic strip system, 99.9% of credit card frauds doesn't rely on this. They rely on having the card/device (doesn't matter if it's a card or a phone at this point) as well as the PIN. You still need to carry your credit card for places not accepting NFC and online purchases. So you can still get your card stolen, plus you can get your phone stolen too. That's less security overall, not more.
Apple has been somewhat successful but not for the security reason. It's because it's cool to pay with a phone so customers want it (as long as it's free!!!)
The weakest door is magnetic stripe. Chip and pin solved it. Apple Pay is no more secure than chip and pin. In both cases, if you have the device/card and the pin, you can make a payment.
Don't forget when Apple Pay was introduced the roll-out banks came out and said that Apple Pay was extremely safe and the transactions were getting a rate that reflected that safety.
Again, that only happened in the US, because of the prevalence of magnetic stripes. In the rest of the world, the banks tried to avoid Apple Pay.
Put it another way. If it really saved costs (because of less fraud), then why is Apple forcing the banks/merchants not to add an extra fee for the use of Apple Pay? If it's so great, merchants would give you a discount if you used Apple Pay instead of chip and pin card payment, right? And such a clause in the contract would be useless.
I am perfectly aware of the fee structure, and detailed it perfectly in the very first post. I just don't believe the banks will forfeit their profit. They will pass that fee down to the merchant, and then to the consumer. And I also don't believe this will bring down fraud. What will make a difference is to stop allowing magnetic stripes and have a password for online purchases. Both are possible (and being implemented) long before Apple Pay.
Most countries have moved out of the magnetic strip payment option. We are still stuck with it mostly because of the USA. Otherwise it's only chip+pin and NFC. The banks in countries outside of the USA are therefore resisting against Apple Pay as much as they can.
You can add and remove cards from Apple Pay as you please and you can choose which card you use (override the default you set) when you do the transaction. So if you change banks or cards you don't install another app and set it up as you would if you used bank apps.l That's why these banks don't like it
I can't believe you believe in what you just said. When I change bank or card, I just change my card. No need to "install" or "configure" anything.
The possibility of using Apple Pay in a fraudulent transaction is close to non-existent without physical possession and control over your devices
They need your PIN and your device. Much like with a card. Except when paying online of course. How do you pay online with Apple Pay again? That's right, you need your card number and expiration date. The solution to online fraud is to have a password. Visa and Mastercard started implementing it.
In store you need the PIN, whether you have Apple Pay or not. Although when using Apple pay, the fingerprint is another possibility. Credit card fraud is already so low that they allow, on purpose, contact less payment without PIN (for low amounts). They do it because it is faster. That's worth more than the frauds themselves. If fraud was such an issue, they would add PIN to contactless card payments. But they don't. It's a great sign that what Apple offers isn't worth 0.15-0.3% fee, not even close. It's even slower than a card contactless payment since you need to put your finger on the scanner. Finally, your phone need to be charged, turned on, and with signal.
The main advantage is therefore privacy. I wonder who is willing to pay 0.15-0.3% for that. Outside of Slashdot, I bet no one.
Apple Pay doesn't charge the merchants at all. It's the card issuers who pay Apple and they are will to do so because Apple Pay is much more secure than their own systems - chips and strips. It saves the banks money because it drastically reduces the fraud rate. So, no consumers are not paying for this.
The banks are not willing to do so. They do it because they are forced to do it. That's why Apple Pay is not available in most countries. Banks do not want Apple Pay. Users want Apple Pay. Because they think it's cool. And it appears free (even if it's not). When one bank start accepting Apple Pay, users want to move to that bank. So other banks react by offering Apple Pay too. And all banks pay the fee. The fee is passed to the merchant, and in the end to the consumer. In the end, everybody loose but Apple.
The payment system is exactly as it was before, using the very same terminals, no less hackable, the chip+pin and contactless payments options remain available. The only thing that changed is that there is a new middle man and a new fee.
Except the USA, pretty much every one has moved out of the magnetic swipe payments. Apple Pay do not have enough benefit over regular chip+pin (which can also be contact-less) cards to justify yet another middle man.
And Apple Pay will never replace chip+pin cards simply because not everybody has an iPhone. Therefore the global payment system will always need to support payments method others than Apple Pay. A castle is as insecure as its weakest door. Apple Pay doesn't address the problem of the weak door at all, and therefore adds no added security to the global payment system.
It does have some privacy benefits. But go ahead and charge that 0.3% (or whatever) fee directly to the customer and see how much the average user cares about that. Why do you have to force that fee down the throat of those who do not want it?
Apple Pay isn't new competition. It's a new middle man in the credit card payment processing. If Apple Pay bypassed Visa/Mastercard completely then I'd be all for it.
Good point, but I also hope that all this reward programs will die to. I think it should be outlawed to force a merchant not to charge more to the customer when you pay using a reward card. This way you would see how many customers are interested in paying 2% more to get 0,5% worth of Air Miles that can't be used on all flights.
We don't need yet another middle man charging yet another fee. And no, Apple Pay is not free for the end user. There is a hidden fee charged to the bank, which end up being charger to the merchant, which end up being charged to the consumers one way or another.
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That's why I said a DIFFERENT fraud is possible. INSTEAD of capturing a pin on camera, you must:
-get someone fingerprints while sleeping
-cut his finger
two methods which are not possible with pin.
Apple added such a clause in their contracts with the banks. They didn't want the merchants to get charged more when they use Apple Pay, because they know it would mean the death of their payment method.
Then I guess a different type of fraud is possible. Just not the one we are used to (capture pin on camera).
There ALSO were agreements between the credit card providers and merchants.
Which are still valid in most places including Canada.
They negotiated on the premise of what they can charge, period. That fee will end up being passed on to the consumer. If there was a cost saving (less fraud), then they wouldn't need to add a clause to the contract forbidding banks and merchants to charge more for Apple Pay.
unless you have a PIN, isn't it?
You clearly don't get what a middle man is.
Both Apple Pay and Google Pay deserve to die. They are both an extra middle man charging a fee.
here the fuckhead is Apple charging a fee
so the answer is: you can't.
There is no such law. You read me wrong. Apple and the banks forbids the merchants from charging more for credit cards. That should be outlawed, the merchants should be free to do that if they want to. This way, they could charge more for Apple Pay and see who is in.
So when the online merchant ask for the expiration date, what do I enter if I want to use Apple Pay?
I'm sure a camera can get you entering the pin on your phone just like on terminals.
It does. But once you get rid of the legacy magnetic strip system, 99.9% of credit card frauds doesn't rely on this. They rely on having the card/device (doesn't matter if it's a card or a phone at this point) as well as the PIN. You still need to carry your credit card for places not accepting NFC and online purchases. So you can still get your card stolen, plus you can get your phone stolen too. That's less security overall, not more.
Apple has been somewhat successful but not for the security reason. It's because it's cool to pay with a phone so customers want it (as long as it's free!!!)
The weakest door is magnetic stripe. Chip and pin solved it.
Apple Pay is no more secure than chip and pin. In both cases, if you have the device/card and the pin, you can make a payment.
Don't forget when Apple Pay was introduced the roll-out banks came out and said that Apple Pay was extremely safe and the transactions were getting a rate that reflected that safety.
Again, that only happened in the US, because of the prevalence of magnetic stripes. In the rest of the world, the banks tried to avoid Apple Pay.
Put it another way. If it really saved costs (because of less fraud), then why is Apple forcing the banks/merchants not to add an extra fee for the use of Apple Pay? If it's so great, merchants would give you a discount if you used Apple Pay instead of chip and pin card payment, right? And such a clause in the contract would be useless.
I am perfectly aware of the fee structure, and detailed it perfectly in the very first post.
I just don't believe the banks will forfeit their profit. They will pass that fee down to the merchant, and then to the consumer. And I also don't believe this will bring down fraud. What will make a difference is to stop allowing magnetic stripes and have a password for online purchases. Both are possible (and being implemented) long before Apple Pay.
Most countries have moved out of the magnetic strip payment option. We are still stuck with it mostly because of the USA. Otherwise it's only chip+pin and NFC.
The banks in countries outside of the USA are therefore resisting against Apple Pay as much as they can.
You can add and remove cards from Apple Pay as you please and you can choose which card you use (override the default you set) when you do the transaction. So if you change banks or cards you don't install another app and set it up as you would if you used bank apps.l That's why these banks don't like it
I can't believe you believe in what you just said. When I change bank or card, I just change my card. No need to "install" or "configure" anything.
The possibility of using Apple Pay in a fraudulent transaction is close to non-existent without physical possession and control over your devices
They need your PIN and your device. Much like with a card. Except when paying online of course. How do you pay online with Apple Pay again? That's right, you need your card number and expiration date. The solution to online fraud is to have a password. Visa and Mastercard started implementing it.
In store you need the PIN, whether you have Apple Pay or not. Although when using Apple pay, the fingerprint is another possibility.
Credit card fraud is already so low that they allow, on purpose, contact less payment without PIN (for low amounts). They do it because it is faster. That's worth more than the frauds themselves. If fraud was such an issue, they would add PIN to contactless card payments. But they don't. It's a great sign that what Apple offers isn't worth 0.15-0.3% fee, not even close. It's even slower than a card contactless payment since you need to put your finger on the scanner. Finally, your phone need to be charged, turned on, and with signal.
The main advantage is therefore privacy. I wonder who is willing to pay 0.15-0.3% for that. Outside of Slashdot, I bet no one.
Apple Pay doesn't charge the merchants at all. It's the card issuers who pay Apple and they are will to do so because Apple Pay is much more secure than their own systems - chips and strips. It saves the banks money because it drastically reduces the fraud rate. So, no consumers are not paying for this.
The banks are not willing to do so. They do it because they are forced to do it. That's why Apple Pay is not available in most countries.
Banks do not want Apple Pay. Users want Apple Pay. Because they think it's cool. And it appears free (even if it's not). When one bank start accepting Apple Pay, users want to move to that bank. So other banks react by offering Apple Pay too. And all banks pay the fee. The fee is passed to the merchant, and in the end to the consumer.
In the end, everybody loose but Apple.
The payment system is exactly as it was before, using the very same terminals, no less hackable, the chip+pin and contactless payments options remain available. The only thing that changed is that there is a new middle man and a new fee.
Then it's even worse as a merchant needs to support all three of mastercard, visa and amex to be "apple pay" compliant.
You are still tied to a bank and a credit card. You are just being tied to Apple as well (a 3rd middle man).
And it doesn't reduce the fraud rate because banks and merchants still have to support chips and strips.
Except the USA, pretty much every one has moved out of the magnetic swipe payments. Apple Pay do not have enough benefit over regular chip+pin (which can also be contact-less) cards to justify yet another middle man.
And Apple Pay will never replace chip+pin cards simply because not everybody has an iPhone. Therefore the global payment system will always need to support payments method others than Apple Pay. A castle is as insecure as its weakest door. Apple Pay doesn't address the problem of the weak door at all, and therefore adds no added security to the global payment system.
It does have some privacy benefits. But go ahead and charge that 0.3% (or whatever) fee directly to the customer and see how much the average user cares about that. Why do you have to force that fee down the throat of those who do not want it?
Apple Pay isn't new competition. It's a new middle man in the credit card payment processing.
If Apple Pay bypassed Visa/Mastercard completely then I'd be all for it.
Good point, but I also hope that all this reward programs will die to. I think it should be outlawed to force a merchant not to charge more to the customer when you pay using a reward card. This way you would see how many customers are interested in paying 2% more to get 0,5% worth of Air Miles that can't be used on all flights.
We don't need yet another middle man charging yet another fee. And no, Apple Pay is not free for the end user. There is a hidden fee charged to the bank, which end up being charger to the merchant, which end up being charged to the consumers one way or another.