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When the Apple Pay mobile wallet was introduced in 2014, banks started to act fast. They have some regrets.

When Apple Pay launched, the tech giant got big banks, including JPMorgan Chase and company, Capital One Financial Corporation memory 1.57% And Bank of America Corporations to agree to pay fees that will allow their cardholders to pay by iPhone. But some banks have been unhappy with the cost, especially after Apple Inc. AAPL 1.42% Introduced your new credit card in 2019, according to people familiar with the matter.


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Some banks are pushing back, undermining card networks Visa Inc. V -0.20% To change the way some Apple Pay transactions are processed, according to some. This change will reduce the fees that banks pay to Apple.

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According to people familiar with the matter and a document seen by The Wall Street Journal, Visa plans to implement the change next year. Apple executives have told Visa officials they oppose the change, the people said. The two companies are in discussion and it is possible that the planned change will not start.

Currently, banks pay the fee to Apple when their cardholders use Apple Pay. Under the new process planned, the fee will not apply to automatic recurring payments such as gym memberships and streaming services.

The dispute reflects a long-running tension between the tech and finance giants. Apple and . companies like Amazon.Com Inc. has been expanding into consumer payments for years. Banks often bargain with them, fear of being left behind. But deals don’t always work out: Alphabet For example, Inc. of google is Dropping plans to pitch bank accounts to users.

Apple said in a statement that “our banking partners are an important part of the growth of Apple Pay.”

The company said, “Our bank partners continue to see the benefits of providing Apple Pay and have invested in new ways to implement and promote Apple Pay to our customers for secure and private in-store and online purchases.” “

Major networks including Visa and master card Inc. There are effective gateways between banks and Apple Pay, as they help to load banks’ cards into mobile wallets. The change will apply to Visa-branded cards, though other networks may follow suit.

mobile wallet There are smartphone apps on which people can load their debit- or credit-card credentials to make payments and use their phones instead of tangible cards. The transaction fee is charged to the buyer’s card.

when apple Apple Pay introduced in 2014The iPhone had already turned off the music player, camera, and GPS system. Banks and card networks are worried it will displace card payments as well.

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Banks agreed to pay 0.15% to Apple for every purchase made by their credit cardholders. (They pay a separate fee on debit-card transactions.) Those charges account for most of the revenue Apple makes from its digital wallet, according to people familiar with the matter.

The terms had the potential to be uniquely attractive to Apple. banks do not pay fees Google your wallet.

Visa and MasterCard also agreed to make an unusual concession to Apple: Apple will be able to choose which issuers it will allow on Apple Pay and which issuers will accept cards, according to people familiar with the matter. Visa and MasterCard generally require that all entities that accept their credit cards must accept them. Apple agreed not to develop the card network to compete against Visa and MasterCard, the people said.

But since then, customers have been slower to adopt Apple Pay than bank and card network executives expected. And some bank executives were outraged when Apple launched its own credit card in 2019 Goldman Sachs Group Inc., said people are familiar with the matter, as it has made Apple a direct competitor.

Apple said in a statement that it “works closely with approximately 9,000 banking partners to offer Apple Pay to customers in approximately 60 countries and territories.”

Visa has shared its planned technological change with at least a few banks in recent months. A document reviewed by the Journal explains the new process that doesn’t mention fees, but details a change to so-called tokens issued by Visa for mobile-wallet payments.

When consumers load their credit cards on Apple Pay, Visa issues a special token that replaces the card number. This allows the card to work on Apple Pay and also helps protect the card in a potential data breach, among other benefits.

Visa is planning to start using a separate token on recurring automatic payments. This effectively means that after making the first payment on the subscription, Apple will not receive a fee on the following transactions.

According to people familiar with the matter, some of the larger banks first tried to lower their Apple Pay fees around 2017, but were not successful.

To read more from The Wall Street Journal, Click here.