Apple CEO Tim Cook introduces Apple Pay on Tuesday, Sept. 9, 2014, in Cupertino, Calif.
Apple Pay, Apple’s new mobile payment service it unveiled in Cupertino last week, may net Apple 15 cents on every $100 transaction, according to a report.
The Financial Times cites “two people familiar with the terms of the agreement” about the payments. The FT calls the arrangement an “unprecedented deal, giving Apple a share of the payments’ economics that rivals such as Google do not get for their services.” The figure, however, is a far cry from the 2.75% that mobile payment provider Square takes from each transaction and shares with credit card issuing partners.
Reps from Apple could not be reached for comment.
Apple unveiled Apple Pay, an NFC-based payment option for iPhone 5 and iPhone 6 models, last week during its blitz of product announcements. Characteristically, Apple was stingy with details about Apple Pay, though it did include a list of participating partners including three of the major credit card companies and banks like Citi, Chase and CapitalOne. In addition, retailers McDonald’s, Subway, Whole Foods and Macy’s.
On Friday, the New York Times offered more details about the arrangement. The participating banks are offering Apple “a lower rate than they normally accept from credit card transactions,” according to the report. The banks are making a calculated bet that they will “make up for the lower rates by processing new types of transactions that are currently being done with case or other payment options.”
Despite Apple’s clout in the market, though, a risk is still involved. Not everyone is sold on Apple Pay; notable holdouts include Walmart and Best Buy.
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