According to a Financial Times report, Apple is set to receive 0.15 percent of each transaction that is made through its Apple Pay service for the new iPhone 6, 6 Plus and Apple Watch. This equates to 15 cents in every $100 purchase.
The report states that this is an “unprecedented deal, giving Apple a share of the payments’ economics that rivals such as Google do not get for their services.”
According to bank executives who spoke to the Financial Times, Apple was able to successfully negotiate with so many financial partners due to the industry not seeing any threatening aspects in Apple’s new service, as well as the payment model keeping banks central to all payments.
Another potential reason for such a lucrative deal is the added security that Apple has provided through its Touch ID fingerprint technology, which will be part of the Apple Pay service. Other technologies such as NFC (near-field communication) and the token system that encrypts data are either already being used in other devices or cards, or are at least planned for future use.
NFC is the same technology used in PayPass, the system that many Australians are currently using via their credit and debit cards, and now will also feature inside every iPhone 6, iPhone 6 Plus and Apple Watch.
Apple Pay will initially launch in the US in October, but it is not expected to reach Australia until at least 2015 as the token encryption system from Visa is not yet in operation.
Apple Pay is the new payment system announced at the 9 September media event. It will utilise NFC (near field communication), built into the top of the new iPhone models and the Apple Watch models, and allow users to make swipe payments from credit cards stored in the company’s Passbook app.