A report from The New York Times took a more close look at the new Apple Pay mobile payment initiative and revealed that credit card issuing banks not only adopted the service but offered low per-transaction fees in the process. By supporting Apple Pay, major banks like JP Morgan Chase are running the risk of losing potential revenue to the tech giant. Despite all the negatives, partnerships were created due to Apple’s vast market reach and threats to traditional card networks.
Part of the worries come from the new out-of-network payment initiatives created by groups of powerful retailers such as the Merchant Customer Exchange which includes retailers like Best Buy and Walmart. Unsurprisingly, the big-box retailers recently announced that they won’t be accepting Apple Pay. According to MasterCard’s SVP for mobile product development, James Anderson;
There are schemes that don't respect and honor the payment networks. We want to invest in programs that respect our role in the ecosystem.
Credit card technology has been something that many institutions have been researching and developing with Apple Pay being one of the first initiatives that may be adopted on such a large scale. It is said to be secure through the utilization of tokenized transactions which would swap out actual card numbers with generated codes. Apple Pay will be made available on the iPhone 6 and iPhone 6 Plus handsets as well as the upcoming Apple Watch which is expected to launch early next year.
Source: The New York Times via AppleInsider
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