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Apple Pay charges 0.15% and the credit cards 2 to 3%. If the costs were really revealed to the consumers, I wonder how many of them will opt for the convenience

Apple Pay charges 0.15% and the credit cards 2 to 3%. If the costs were really revealed to the consumers, I wonder how many of them will opt for the convenience versus entering a PIN with a debit card, use a check or pay cash.

gergles 12y ago
Apple Pay's charge is paid by the banks, out of the interchange (the '2-3%' - that is actually more like 1.5% or less for any merchant big enough to be part of CurrentC).
- ntakasaki 12y ago
  And where is the banks' money that they're paying Apple with coming from? This is like how people are made to think a new flagship smartphone from AT&T costs them $199.
  - function_seven 12y ago
    Reduced fraud, I believe.
    - ntakasaki 12y ago
      Cash has close to zero fraud, why does someone paying cash has to pay the merchant the credit card fees %?
      - function_seven 12y ago
        They don't as far as I know. Merchants are free to offer discounts for cash.
        ntakasaki 12y ago
        Very few merchants do that. I am talking about the end result of the current setup where a typical consumer pays $400 per year in credit card fees while buying things. This is because the true cost of using cards are hidden from them because of the merchants, just carriers do for a $199 iPhone.
        function_seven 12y ago
        That is a valid point. I personally offset that $400 with rebates. The remaining amount is totally worth it to me to have chargeback ability, extended warranties, insurance on my rental cars, and all the other perks you can get from credit cards. Having to visit ATMs and be responsible for actual cash is a (small) burden that I'm happy to be rid of. On the merchant end of things, accepting card payments reduces their exposure to risk from theft (both internal and gun-in-your face type). For the big guys, the fee is in the low 1%. But you're right about the lack of transparency. If card fees were required to be itemized separately, the whole dynamic would shift dramatically. But as far as Apple Pay and similar systems are concerned, the 0.15% is bitten off the banks' fee already, and the price of the transaction isn't based on cost, but on value. As a thought experiment, imagine if Apple stopped taking a 30% cut of app store purchases. Do you think that $0.99 games would be priced at $0.69? Probably not. I think the same is probably true of merchant fees--that they're not going to--on average-- increase by 0.15%. We'll know for sure in the next several years though.
        wfjackson 12y ago
        >That is a valid point. I personally offset that $400 with rebates. The remaining amount is totally worth it to me to have chargeback ability, extended warranties, insurance on my rental cars, and all the other perks you can get from credit cards Now, imagine a poor or homeless person with bad credit that pays in cash, debit or non-rewards credit card. That person is paying more for the same things compared to you at the store and gets none of those perks. >As a thought experiment, imagine if Apple stopped taking a 30% cut of app store purchases. Do you think that $0.99 games would be priced at $0.69? Probably not. Even if not, the developer has 30% more to spend on developing the app, resulting in more and better apps. Apple, meanwhile, is buying back stock and giving dividends with all the extra cash because they don't know what to do with it.
        brigade 12y ago
        Only since January 27, 2013, and not in all states. [1] [1] http://usa.visa.com/personal/get-help/checkout-fees.jsp http://usa.visa.com/personal/get-help/checkout-fees.jsp
      - saryant 12y ago
        > Cash has close to zero fraud Employees skimming off the till?
        fleitz 12y ago
        That's theft, not fraud. If someone pays with cash it's highly unlikely for the transaction to be reversed.
        saryant 12y ago
        And the merchant cares, why? Money lost is money lost.
      - porlw 12y ago
        Handling cash costs money too - security guards, safes, deposit runs, counting.
RockyMcNuts 12y ago
Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. But yeah, it's a stupid way to run a payments system. You would think Starbucks would give you a free cup or something if you filled up your Starbucks stored-value card by EFT instead of credit card. (You would also think Starbucks wouldn't make me accept the wifi TOS every goddamn day, when they have an app/loyalty card relationship with me.) You would also think that maybe Apple is leaving their options open in the future to 1) link up with retailers' loyalty programs and 2) help retailers bypass Mastercard and Visa and share in the savings.
- ntakasaki 12y ago
  >Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. This actually makes it worse, since the people who pay with cash are typically poor and homeless who cannot get a credit card, yet the richer folks with rewards cards get cashback while they don't. Edit: Downvotes why?
- dingaling 12y ago
  > Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. The reward level is set by the card issuer and the merchant pays that, too, as part of the interchange fee. In Australia legislation was passed that enabled merchants to add a surcharge for credit card use. The result was that 'rewards' disappeared from the market.
  - saryant 12y ago
    Merchants can offer cash discounts in the US. Few do and credit card rewards are the strongest they've ever been. 2% on everything is easy, bigger discounts are available if you work for it.

gergles 12y ago

Apple Pay's charge is paid by the banks, out of the interchange (the '2-3%' - that is actually more like 1.5% or less for any merchant big enough to be part of CurrentC).

ntakasaki 12y ago
And where is the banks' money that they're paying Apple with coming from? This is like how people are made to think a new flagship smartphone from AT&T costs them $199.
- function_seven 12y ago
  Reduced fraud, I believe.
  - ntakasaki 12y ago
    Cash has close to zero fraud, why does someone paying cash has to pay the merchant the credit card fees %?
    - function_seven 12y ago
      They don't as far as I know. Merchants are free to offer discounts for cash.
      - ntakasaki 12y ago
        Very few merchants do that. I am talking about the end result of the current setup where a typical consumer pays $400 per year in credit card fees while buying things. This is because the true cost of using cards are hidden from them because of the merchants, just carriers do for a $199 iPhone.
        function_seven 12y ago
        That is a valid point. I personally offset that $400 with rebates. The remaining amount is totally worth it to me to have chargeback ability, extended warranties, insurance on my rental cars, and all the other perks you can get from credit cards. Having to visit ATMs and be responsible for actual cash is a (small) burden that I'm happy to be rid of. On the merchant end of things, accepting card payments reduces their exposure to risk from theft (both internal and gun-in-your face type). For the big guys, the fee is in the low 1%. But you're right about the lack of transparency. If card fees were required to be itemized separately, the whole dynamic would shift dramatically. But as far as Apple Pay and similar systems are concerned, the 0.15% is bitten off the banks' fee already, and the price of the transaction isn't based on cost, but on value. As a thought experiment, imagine if Apple stopped taking a 30% cut of app store purchases. Do you think that $0.99 games would be priced at $0.69? Probably not. I think the same is probably true of merchant fees--that they're not going to--on average-- increase by 0.15%. We'll know for sure in the next several years though.
        wfjackson 12y ago
        >That is a valid point. I personally offset that $400 with rebates. The remaining amount is totally worth it to me to have chargeback ability, extended warranties, insurance on my rental cars, and all the other perks you can get from credit cards Now, imagine a poor or homeless person with bad credit that pays in cash, debit or non-rewards credit card. That person is paying more for the same things compared to you at the store and gets none of those perks. >As a thought experiment, imagine if Apple stopped taking a 30% cut of app store purchases. Do you think that $0.99 games would be priced at $0.69? Probably not. Even if not, the developer has 30% more to spend on developing the app, resulting in more and better apps. Apple, meanwhile, is buying back stock and giving dividends with all the extra cash because they don't know what to do with it.
      - brigade 12y ago
        Only since January 27, 2013, and not in all states. [1] [1] http://usa.visa.com/personal/get-help/checkout-fees.jsp http://usa.visa.com/personal/get-help/checkout-fees.jsp
    - saryant 12y ago
      > Cash has close to zero fraud Employees skimming off the till?
      - fleitz 12y ago
        That's theft, not fraud. If someone pays with cash it's highly unlikely for the transaction to be reversed.
        saryant 12y ago
        And the merchant cares, why? Money lost is money lost.
    - porlw 12y ago
      Handling cash costs money too - security guards, safes, deposit runs, counting.

RockyMcNuts 12y ago

Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. But yeah, it's a stupid way to run a payments system. You would think Starbucks would give you a free cup or something if you filled up your Starbucks stored-value card by EFT instead of credit card. (You would also think Starbucks wouldn't make me accept the wifi TOS every goddamn day, when they have an app/loyalty card relationship with me.) You would also think that maybe Apple is leaving their options open in the future to 1) link up with retailers' loyalty programs and 2) help retailers bypass Mastercard and Visa and share in the savings.

ntakasaki 12y ago
>Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. This actually makes it worse, since the people who pay with cash are typically poor and homeless who cannot get a credit card, yet the richer folks with rewards cards get cashback while they don't. Edit: Downvotes why?
dingaling 12y ago
> Well, if you shop for it, a cardholder can get a minimum of 1% rebated back to them, more in cases of special promotions. The reward level is set by the card issuer and the merchant pays that, too, as part of the interchange fee. In Australia legislation was passed that enabled merchants to add a surcharge for credit card use. The result was that 'rewards' disappeared from the market.
- saryant 12y ago
  Merchants can offer cash discounts in the US. Few do and credit card rewards are the strongest they've ever been. 2% on everything is easy, bigger discounts are available if you work for it.