Pixel Envy

Written by Nick Heer.

A Year of Apple Pay

Graham Spencer, resident international data specialist for MacStories:

The interchange fee has become a sticking point in negotiations between Apple and international banks because outside the US the interchange fee is much lower. In the European Union, interchange fees have been capped at 0.2% of the transaction value for debit cards and 0.3% for credit cards; at those levels, Apple’s 0.15% cut is clearly untenable. This is no doubt why in the UK, the banks ultimately reached an agreement where Apple would get “a few pence per £100 transaction“.

There are reports from Australia, China and Canada, all claiming similar battles between local banks and Apple.

Given the wide presence of contactless payment terminals in Canada — many of which have sprung up over the past two or three years — I was surprised that it didn’t launch here, nor has there been much indication of progress. Overbearing commission would make sense as something that would slow its availability. But the degree to which this is true remains a mystery; Apple’s contracts with banks are, of course, secret. If the figures reported in the Financial Times and other reputable sources are true and have not significantly changed in the past year, I question whether Apple’s hardball stance is likely to prevail, or if it will hamper Apple Pay’s rollout. It worked for cell carriers, but that’s because the iPhone was a completely new and different product; Apple Pay is more convenient, but is more like an abstraction of a credit card. Banks probably don’t see themselves going anywhere or getting left behind. Commerce, after all, is vastly older than almost any other industry.