Apple Inc. (NASDAQ:AAPL) reportedly would get 15 cents on every transaction worth $100 made through its mobile payment service ‘Apple Pay,’ as per the report from the Financial Times citing two people familiar with the terms of the agreement. This service was unveiled last week along with the new bigger iPhones.
Not much details from Apple
This is a new kind of deal, where Apple Inc. (NASDAQ:AAPL) is getting a share of the payments made through its mobile payment service. The rivals such as Google do not get a similar share for their services. However, the deal is inferior to the one enjoyed by the mobile payment service provider Square that charges 2.75% of all the transactions made through its service, and shares this fee with the partners that issue credit card.
Apple Pay is an NFC based payment option unveiled by last week for the iPhone 5 and the iPhone 6 models along with the new products it announced the same day. Apple did not disclose many details about this new mobile payment system, but it did inform who the participating partners. The partners include major credit card companies and banks like Citi, Chase and CapitalOne. Major fast food chains like McDonald’s, Subway, Whole Foods and Macy’s are few of the participating retailers.
Secured payment service from Apple
Another report from the New York Times, revealed more details on the payment arrangement by Apple Inc. (NASDAQ:AAPL). The report informs that Apple has been offered a lower rate on credit card transactions from the participating banks than they accept in normal course of transactions. Banks are hoping to recover the lost amount by processing new types of transactions. These transactions are presently done through case or other payment options at present.
Bank executives have informed that there was nothing threatening with Apple Pay and this helped the company to negotiate with large number of partners and also receive favorable deals. Apple Pay also comes with tight security features that have helped it bag good deals. A one-time token is needed for making payments via NFC, and all the payments are secured with a Touch ID fingerprint.