The state of Apple Pay adoption | Hacker News Reader

The state of Apple Pay adoption

reuters.com

20 pointshuhtenberg55 comments

> Some merchants said they were holding out because they plan to participate in a new mobile payment system to be launched by a coalition of retailers later this year.

Oh yes, CurrentC. http://techcrunch.com/2014/10/25/currentc/

> The idea behind MCX was that if enough retailers teamed up, they could convince consumers to adopt their mobile payment system that would let retailers avoid paying credit card fees in the 2 percent to 3 percent range by processing payments through Automatic Clearing House transactions through bank accounts that have much smaller fees. MCX’s app could also help retailers by encouraging loyalty to participating merchants and possibly provide them additional intelligence on their customers.

They want to save money on transaction fees by having your bank account info on file. But don't worry, I'm sure they'll keep in safe. No history of huge data breaches or anything to be concerned about. Meanwhile, their app is a seaspool of their wildest marketing and promotional dreams coming to fruition. It's purpose / existence is not at all for you, it's entirely for them.

Every product exists to make/save money for its owners. Apply pay and stripe are no different. The glaring question mark is whether a consortium of retailers, none of which are that strong in tech, can actually make a product that holds up and is, as you say, secure.

> The state of Apple Pay adoption

This is the thing that amuses me - Why is rollout of contactless so slow, and why is it being reported as being specific to Apply Pay?

AFAIK there's nothing for retailers to do to support Apple Pay! As long the reader the EMV contactless standard, it supports Apple Pay (and PayWave and PayPass and other brand names). It's all on issuing bank to support 'issuing' Apple Pay 'cards'.

I added my US credit-card to my iPhone and used it with Apple Pay here in Australia many times. Even small independent cafes support apple pay because they just support contactless payments.

Despite being much smaller, Australia is the largest market in the world in terms of contactless usage[1]. From last year:[2]

    More than 58 million Visa PayWave payments were made in July
    alone, up from 28 million a year ago and 40 million in
    January with average transactions standing at $31.38.

[1]: http://www.mastercard.com.au/_assets/docs/2014-03%20MCW_RBA_... [2]: http://www.news.com.au/finance/money/contactless-tapandgo-pa...

Not that simple. EMV doesn't automatically mean it will work. In fact, half the time I shop at an Apple Pay retailer, it doesn't work.

I believe that's because they specifically disable applePay in favor of an alternative service

Support in Canada is also pretty good. I think the only retailer in my regular routine (Kitchener, Ontario) who doesn't have contactless POS is a building supply store.

It always boggles my mind being in the US and realizing the number of places which with either don't take cards at all, or have only stripe-and-sign.

Cards have big fees attached, so many smaller retailers insist on cash so they don't lose 3% of their income. Even at small, local places that do take cards, I try to always pay in cash to help support them.

In my experiences, it seems that contactless payments just never caught on in the US and I'm not sure why. I remember in the early 00's when mobil (the gas station) had their speedpass system that was a key fob (linked to your credit card) that you waved in front of the pump. I'm not sure how long they lasted but I haven't seen any for quite some time now. Similarly, I had an american express card some years ago, that had an rfid (I think) chip build into the card to wave in front of a card reader rather than swipe. If I remember correctly, I was able to successfully use that once, as most machines would fail. I've also tried (and usually failed) to use the Google Wallet version from my Nexus 4, when it came out.

Come to think of it, of all the people I know with a new iPhone, exactly 0 of them have their cards imported to apple pay. I've also never witnessed anyone else using it at a store. From my memory, whenever I'd try and use these systmems, the store clerks would always say "it's the coolest thing they've seen" (aside from speedpass, since I was alone at the pump). However, they seemed to take more time than to just swipe my card and be done with it. Maybe that's why?

Edit: Also in my area (south florida), outside of major retailers the support for these is atrocious. Most places only have the small telephone line based readers to print and sign.

>Why is rollout of contactless so slow, and why is it being reported as being specific to Apply Pay?

It's a response to all the "Apple Pay to singlehandedly revolutionize and popularize contactless payments" articles seen over the past few months.

That and having Apple in the headline drives page hits.

Why doesn't Apple subsidize the cost of the POS devices that are compatible with Apple Pay? If the big hurdle for businesses, big and small, is the cost of upgrading their POS, then perhaps a company with $200B in cash sitting around could help pay for that. Average POS device is $2000 (1), and there are 10 million POS devices (2) in the US. If Apple covers 50% of everyone's upgrade, that's $10B. About 3 months of profit for Apple.

1 - http://smallbusiness.costhelper.com/point-of-sale.html 2 - http://www.gaoresearch.com/POS/pos.php

Your cost per station is wildly undervaluing things, since you are not taking into account shipping, installation, training, verification, auditing, disaster recovery planning, etc, etc.

Forgetting the exact cost, Apple has enough cash to give retailers an incentive and may have already done that with those that are already onboard. Note I said "incentive" not "paid for everything". This wouldn't be something that they would necessarily disclose either, for obvious reasons.

I believe the reason is because all those paypoints have to be upgraded to handle Chiped cards by the beginning of next year. Why lose 3 month's profit when in 6 month's time, the same result will happen.

At least, I don't think there are many modern paypoints that don't allow for NFC payment.

edit: http://blogs.wsj.com/corporate-intelligence/2014/02/06/octob...

Of course this article is old and I don't know if there'll be some sort of, "Wait, wait no!", moment or something.

The POS does not need to be compatible. The card reader alone does. The relatively high end Verifone VX 680 devices (which are the most popular in the UK from what I can tell), cost about $300 each. Really not that much.

The resistance really just boils down to 'we can't track our customers any more'. Big chains' POS systems almost all have contactless readers built in (but disabled).

To me this is a feature-I don't particularly want to be profiled by the places I shop at.

I find it particularly annoying that Apple Pay isn't in the UK yet, although we've had contactless for a few years.

Same situation in Canada. About 80-90% of retailers have contactless payment terminals. No Google or Apple Pay though. Tapping a credit card is easy enough though.

If I recall correctly, Google Wallet should work with any of those contactless payment terminals. I've tried it a few times in the US, anyway.

the problem isn't in the hardware. It is in the backend payment processing. Both Apple Pay and Google Wallet have hardware support, just not the banking relationships.

Probably better to support a platform agnostic solution rather than bolstering a manufacturer's specific option.

Apple Pay isn't just contactless - it's also tokenized. See http://newsroom.mastercard.com/wp-content/uploads/2014/10/02...

In Houston the uptake rate is abysmal. I think Walgreens is one of the few places I see readers consistently. As a result it's not habitual to pay with my phone. Even if I am holding it while checking out. I do pay with the Starbucks app which I believe I would start using apple pay if it showed up there. The Starbucks rewards system is so incredibly broken that I rarely cash them in or think to use them. I could get a free drink for going a dozen times spending 2 dollars or 30 dollars. Does not compute.

Apple Pay is literally a win for everyone

* Customers have an easier, securer way to pay than chip & PIN (swipe only will be phased out as it has in Europe)

* VISA/MC/AMEX get a reduction in transaction fraud due to device-linkage (combined with biometrics).

* Retailers can process transactions quicker without them costing more.

My sister, a retailer, didn't see it that way. It cost her something. Her normal (coffee-shop) transaction is cash. This scheme is a big loss for her.

Why would people not use plastic currently and now adopt Apple Pay?

Its another gadget and training and relationship with another billing entity and register programming and ....

Why would any of that be different? As I understood it, from the point of view of the retailer it's no different than a (contactless) card. So sure, she might have to update her POS, but is going to have to do that anyway. So no different gadget, no different training, maybe another processer but maybe what she's already using?

What am I missing?

She most certainly doesn't have to update her POS. She can sit tight, accept cash and cards and do fine.

My understanding was the chip and pin / EMV is coming for all merchants in the US pretty soon, regardless of what they think of it. If your forced into making that change, supporting apple pay isn't anything much additional. Of course I could be wrong about that.

Remember, handling cash has costs associated with it as well. They're just not as direct as credit card processing fees.

Cash also offers a level of freedom not offered by electronic payments, something that I think our future selves will learn to appreciate.

Grrr! Cash only retailers! You don't get my money.

Didn't say that. She takes plastic too.

How would Apple Pay be a big loss for her then? From her perspective it's no different to regular debit/credit cards

Because cash can be lost in the shuffle, and there is not necessarily a hard record of it ever existing.

If everything is on the level, then there's no loss.

Why would it be a loss, then? People using Apple Pay were probably paying with a card previously, not cash. Transaction fees remain the same, POS remains the same if it already supported RFID cards, interface remains the same.

Tips, presumably.

I didn't consider tipping culture. A scourge.

Sad that you insist on paying a 3% tithe to the payment processor companies instead of bothering to carry a few pieces of paper around. This hurts your local, small businesses.

It's not the carrying of the paper that's the problem.

I have to know beforehand how much I'll need, and keep that separate from the rest of my funds. This means that I can't use it for anything that would normally come directly out of my account, and can only be used for in-person transactions.

You are over-simplifying the entire process.

If it is apple product it is loss loss for everyone but apple.

I honestly hope Apple spends all of their money on failing business ventures and then slithers back into relative unpopularity.

Retailers lose the ability to track customer behavior and create purchasing models based on credit card number.

Fraud has gone up.

Source for the claim that fraud has increased?

Don't have a citation handy but I have read that some banks would authorize cards for Apple Pay without any decent authentication.

So thieves that had stolen credit card numbers elsewhere registered those cards on their Apple Pay devices and then used those to charge them.

The credit card numbers had already been stolen, but Apple Pay was used to buy things on those accounts.

There is not - that I have ever seen - any indication that Apple Pay has been hacked.

The real fight here is not about Apple at all. It's about banks (who want a new secure standard) vs merchants (who want to maintain their tracking abilities and maybe get out from under the 2% fees).

"An industry consultant, Cherian Abraham, put the fraud rate at 6 percent, compared with a traditional credit card fraud rate that is relatively minuscule, 10 cents for every $100 spent. Mr. Abraham wrote in a blog post, one of the first to spotlight the issue, that the Apple Pay fraud “is growing like a weed, and the bank is unable to tell friend from foe. No one is bold enough to call the emperor naked.”"

"The vulnerability in Apple Pay is in the way that it — and card issuers — “onboard” new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process “frictionless,” the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early."

http://www.nytimes.com/2015/03/17/business/banks-find-fraud-...

Neither Apple nor banks will release official fraud numbers for Apple Pay despite repeated requests.

> Fraud has gone up.

The only banks that have seen higher fraud are those who treated entering your credit card into your phone as a "card present" interaction. All banks who treated it as a "card not present" interaction have seen lowered rates of fraud.

I think the right way to move forward with the "payment system of the future" is to build it on top of a federated network where anyone can participate at any level without the need to go through some central entity. I vote for no more walled gardens.

> Some merchants said they were holding out because they plan to participate in a new mobile payment system to be launched by a coalition of retailers later this year.

Does anyone know what this is referring to?

I would think they're referring to CurrentC

CurrentC - which is an initiative spearheaded by Walmart. Unlike Apple Pay which uses NFC, CurrentC uses the good old QR code scanning technique, which should in theory make it ubiquitous. But it's not happened so far.

Wouldn't that depend on the customers phone having a data connection? You need 2 way communication to produce a secure payment protocol.

The goal isn't to be secure. As far as I understand it would basically be similar to Starbuck's current mobile payment service, where the scanner reads the code which maps directly to an account and processes the transaction. No two way communication.

From personal experience, even retailers that are participating in Apple Pay (Whole Foods, Home Depot, Walgreens) don't accept Apple Pay. Most of the time only half the machines work. As a result, it has failed to be part of my routine. Apple really needs to get Starbucks on board to see real traction.

My main issue with it is I still have to get my wallet out for the grocery store's loyalty card, so I don't get much of a time savings.

Have you tried adding the card to passbook? There are a number of websites that let you generate a passbook card for an arbitrary barcode/qr

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