Apple Pay - Follow the Money

The introduction of Apple Pay, the mobile payment capability through NFC that will be available with the iPhone 6 and the Apple Watch, has raised one important question in the industry.  How is Apple going to make money off of this?

Clearly this move is designed to make the walled garden of Apple's ecosystem even more attractive.  However Apple will want ARR from this as well.  How else to pay for this.

Some folks are digging through the developer guide for Apple Pay and have found some clues.

http://www.digitaltransactions.net/news/story/Apple-Pay_-No-Charge-for-Merchants_-But-Transaction-Security-Fees-for-Issuers

Here is a snippet from that piece:

...“How much does it cost to accept Apple Pay?”

Here is how Apple answered its own question: “Apple does not charge users, merchants or developers to use Apple Pay for payments. Your credit and debit transactions will continue to be handled by the payment networks.”

With users—consumers—and merchants and developers out of the running, the remaining actors on the payments stage for potential revenue generation could only be card issuers and the networks.

...

But now it looks like issuers will be paying about 15 basis points, or 0.15% of an Apple Pay purchase, for what amounts to a guarantee by Apple that a tokenized and biometrically verified transaction is good, a source familiar with the payments industry tells Digital Transactions News.

Next is Walmart's and Best Buy's response to Apple Pay (no way):

http://www.mobilepaymentsinsider.com/2014/09/12/walmart-turns-down-apples-mobile-payment-system/

Here is a quick analysis of Apple Pay vs. CurrentC:

http://www.mobilecommercedaily.com/apple-pay-vs-mcx-which-has-bigger-potential-in-mobile-payments

Finally is word on how to use Apple Pay in the drive-through at McDonalds (it isn't pretty folks):

http://recode.net/2014/09/14/how-youll-buy-a-big-mac-with-your-iphone-at-a-mcdonalds-drive-through/

Happy Reading,

J.W. Gant