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I know they don't take 30%, but I can't figure out what the cost is. According to Apple, it's free, but does the seller generally have to pay more in CC fees to

I know they don't take 30%, but I can't figure out what the cost is. According to Apple, it's free, but does the seller generally have to pay more in CC fees to get Apple Pay support?

shivaas 9y ago
The merchant pays anywhere from 1.6% to 3% of the transaction amount in fees to the payment processors/gateways. Part of this goes to Visa/MC and the issuing banks. Apple gets a cut from them and that's how they make money/break even. The Seller pays their card issuer directly or indirectly. You're not interacting with Apple pay support as Apple pay is not the one processing your payment - its simply storing your card securely and generating a payment token for the merchant when invoked.
abalone 9y ago
That's up to the processor you (the merchant) sign up with, just like anything else. Apple takes 0.15% and that comes out of the card issuing bank's end.[1] Quick 101 on how card fees work generally: Card issuer banks (Citibank, Chase, Bank of America, etc.) contract with a card network (VISA, MC, etc.) and earn a standard fee schedule called Interchange (it's public, you can look it up, typically 1.x-2.x% depending on the card type). This is the bulk of where the card fees go, and often funds card rewards and benefits. Meanwhile merchants contract with processors (e.g. Chase Paymentech, Heartland, First Data, Square, etc. etc.) who interface with all the card networks, marking up those interchange fees with their own margins. The processors may set up merchants with equipment, or maybe a third party POS vendor does that. But most fundamentally processors are responsible for any merchant-related fraud on the network. That is why processor markups and merchant vetting procedures can vary -- and why Apple would never take the place of the processor. It's merchant-specific work and involves financially vouching for them. The less vetting the processor does (Square, Stripe), the higher the markup. The more vetting, the close to interchange the fee is going to be. [1] https://www.digitaltransactions.net/apple-pay-no-charge-for-merchants-but-transaction-security-fees-for-issuers/ https://www.digitaltransactions.net/apple-pay-no-charge-for-...

I know they don't take 30%, but I can't figure out what the cost is. According to Apple, it's free, but does the seller generally have to pay more in CC fees to get Apple Pay support?

shivaas 9y ago

The merchant pays anywhere from 1.6% to 3% of the transaction amount in fees to the payment processors/gateways. Part of this goes to Visa/MC and the issuing banks. Apple gets a cut from them and that's how they make money/break even. The Seller pays their card issuer directly or indirectly. You're not interacting with Apple pay support as Apple pay is not the one processing your payment - its simply storing your card securely and generating a payment token for the merchant when invoked.

abalone 9y ago

That's up to the processor you (the merchant) sign up with, just like anything else. Apple takes 0.15% and that comes out of the card issuing bank's end.[1] Quick 101 on how card fees work generally: Card issuer banks (Citibank, Chase, Bank of America, etc.) contract with a card network (VISA, MC, etc.) and earn a standard fee schedule called Interchange (it's public, you can look it up, typically 1.x-2.x% depending on the card type). This is the bulk of where the card fees go, and often funds card rewards and benefits. Meanwhile merchants contract with processors (e.g. Chase Paymentech, Heartland, First Data, Square, etc. etc.) who interface with all the card networks, marking up those interchange fees with their own margins. The processors may set up merchants with equipment, or maybe a third party POS vendor does that. But most fundamentally processors are responsible for any merchant-related fraud on the network. That is why processor markups and merchant vetting procedures can vary -- and why Apple would never take the place of the processor. It's merchant-specific work and involves financially vouching for them. The less vetting the processor does (Square, Stripe), the higher the markup. The more vetting, the close to interchange the fee is going to be. [1] https://www.digitaltransactions.net/apple-pay-no-charge-for-merchants-but-transaction-security-fees-for-issuers/ https://www.digitaltransactions.net/apple-pay-no-charge-for-...