For every dollar spent on the iOS App Store, Apple makes thirty cents, but if you expect Cupertino to be collecting 30% of every buck spent on Apple Pay, you’re crazy. The world of finance is much more nuanced — and ruthlessly competitive — than selling apps: Apple will have to settle for just fifteen cents for every $100 spent. But that’s actually a lot of money in financial terms.
According to an overview posted by the Financial Times, Apple and its banking and credit card partners are offering lower per-transcation fees in the hopes of making up the percentage in later on volume.
When it comes to running credit cards, banks charge different fees based on risk. If a credit card is being scanned, for example, retailers will pay a lower rate in commission on the sale than if only the card number was run, i.e. the difference between running your card at a store and typing it into a web form.
However, because Apple Pay depends on NFC and is fully integrated into the iPhone 6, banks were able to cut Cupertino a better rate than normal. And while that rate might not be the 30/70 split Apple is used to, it’s still pretty good as far as credit card companies are concerned: 15 cents of every 100 dollars spent. But tgose cents will add up quickly.
Source: Financial Times
Via: MacTrast
John Brownlee is a writer for Fast Company, and a contributing writer here at CoM. He has also written for Wired, Playboy, Boing Boing, Popular Mechanics, VentureBeat, and Gizmodo. He lives in Boston with his wife and two parakeets. You can follow him here on Twitter.
7 responses to “Apple will make 15 cents for every $100 spent on Apple Pay”
I’m surprised it’s so little. Credit card companies can take up to 5% of a sale.
They can, most times, it’s closer to 2-3% though. Square is 2.7% flat fee; and thats for me, who does almost no volume with only a few charges a month and I pay no monthly fee.
Larger volumes retailers, like McDee’s, get a much lower rate, under 2%
Good article, but the spell checker is your best friend. “But tgose cents”..
“if you expect Cupertino to be collecting 30% of every buck spent on Apple Pay, you’re crazy.”
Do you really think your readers are that stupid?
“Do you really think your readers are that stupid?”
Just curious, how stupid are we?
Honestly, IMO, you have to be stupid to think that there aren’t at least a handful of readers who would think that.
“Apple will make 15 cents for every $100 spent on Apple Pay”
Good. If ApplePay works as described, it will be a major boon to purchasing and selling, and Apple will deserve every penny it makes for the idea and implementation.