Apple Pay / Google Wallet: Not So Fast

[Kaido]

It should be noted that for every transaction made through Apple Pay, Apple gets a cut. The retailers get nothing. I don't know how it works with Google Wallet.

The thing is, I know more people using Android at this point than iPhones. I used to see iPhones EVERYWHERE, but now that big (but basic) Android phones are free or cheap ($99), I see a lot of non-technical people using them now. Most of my budget-oriented friends are using the Moto X type of phones. So with Apple limiting it to (1) only new phones, (2) only Apple devices (and not spreading it out to other non-Apple devices), and (3) taking a sizable cut of each transaction, I can see why retailers aren't too excited to jump onboard.

 

[openwheel]

At least, it appears CurrentC provides instant discount over credit card cashback/miles.

So CurrentC, at least on paper, sounds like a good approach.

 

[mosco]

As others have mentioned in this thread, the retailers that are disabling Apple Pay/Google Wallet probably don't care about Apple's cut on the transaction. They just hate CC fees and they don't want to promote a contactless payment system that competes with their own emerging platform.

I used Apple Pay the other day at Whole Foods and it was a pretty good experience. Was it easier than using a card? Not in any real way. You take the phone out of your pocket, put your finger on the finger sensor while placing the phone against the reader and it instantly launches the app and completes. I guess it saves you from having to open your wallet?

The biggest advantage I see is the tokenization which prevents the retailer from seeing my actual card number. You don't currently get this from even wireless CCs.

I can't see myself using CurrenC. I am not interested in linking my bank account to it.

He is very biased, but I do agree with Gruber's take on this.

 

[sgrinavi]

The situation is very very simple.

Credit card companies charge the retailer ~2-3% of the transaction amount. If the retailer makes a sale of $100, the credit card company pays the retailer $97. The credit card company then collects $100 from the cardholder.

Retailers don't like losing out on collecting that extra $3 which really adds up.

So they want to roll their own payment processing system (CurrentC) that debits directly from a customer's bank account, which has much lower fees.

It's not all about the CC fees as others have pointed out - Target has their red card which debits from your bank account. They discount your purchase 5% for using it, otherwise I'd use my CC.

 

[pm]

I have absolutely no desire to link my checking account to a card or service or my phone. First there's the minor risk of overdrafts and such that I never have to worry about with a credit card - if I borrow too much on my credit card then I just can't use the card, while if I take too much out of my checking account the bank will level a flood of fees against me. And then there's the whole issue of liability and dispute recourse - there are far fewer consumer protections when using a debit card and even fewer if it's a straight ACH. I had to dispute a fraudulent ACH withdrawal from my checking account and I had to file paperwork with the Federal Reserve bank, and then wait 5 weeks with zero transparency into the process. Meanwhile with my credit card, I earn miles or dollars and I never have to worry too much about fraud and there's a lovely cheerful person on the other end of a phone line to help me when things go badly.

I would think that the CurrenC guys will have a hard time signing people up unless the discount is substantial, and if so, then it will be an expensive proposition.

 

[Mike64]

Either way, adding another layer simply makes no sense from a consumer's point of view.

ApplePay is somewhat more secure than using even a Chip+PIN credit card, since the retailer never sees your credit card number. And for that matter, neither does Apple, since the number is stored only on the phone.

In general, it only makes sense for people whose lives revolve around their smartphones. Mind you, I'm not one of them - I don't own any sort of smartphone, let alone an iPhone. But there are a lot of people in the world, more and more, who don't seem to be able to function without their eyes glued to a smartphone screen...

As for fees, retailers pay fees, they don't receive them, which is true for every sort of non-cash payment system in existence. Personally, I don't care who gets the payment fees - they're going to be passed on to the consumer in any event, but that ecosystem already exists, in spades.

 

[Mike64]

At least, it appears CurrentC provides instant discount over credit card cashback/miles.

So CurrentC, at least on paper, sounds like a good approach.

No discount is worth paying with a debit card or its equivalent, as far as I'm concerned. Many banks finally got around to offering debit card fraud protection similar to that legally mandated for credit cards, but it's not legally required, and they can change their policies any time they like. On the other hand, federal law requires credit card issuers to limit consumer liability for fraud, so issuers can't play the same kind of games they can with debit cards.

 

[Suspicious-Teach8788]

As others have mentioned in this thread, the retailers that are disabling Apple Pay/Google Wallet probably don't care about Apple's cut on the transaction. They just hate CC fees and they don't want to promote a contactless payment system that competes with their own emerging platform.

I used Apple Pay the other day at Whole Foods and it was a pretty good experience. Was it easier than using a card? Not in any real way. You take the phone out of your pocket, put your finger on the finger sensor while placing the phone against the reader and it instantly launches the app and completes. I guess it saves you from having to open your wallet?

The biggest advantage I see is the tokenization which prevents the retailer from seeing my actual card number. You don't currently get this from even wireless CCs.

I can't see myself using CurrenC. I am not interested in linking my bank account to it.

He is very biased, but I do agree with Gruber's take on this.

I think that in principle Apple Pay should be easier than a real wallet. The difference between Apple Pay and Google Wallet is that your phone screen doesn't even need to be on for Apple Pay.

Interestingly enough I got it to initiate at McDonalds, I scanned my fingerprint and then it told me to hold near the scanner again, but could never pick it up. Maybe its my case? Anyway, I completed the transaction using Google Wallet.

Question for Google Wallet users: I just learned you can initiate Google Wallet from the lockscreen. Does that require you to unlock your lockscreen (if you have a PIN or pattern) or does Wallet initiate through the lockscreen so you ONLY have to unlock Wallet? It could be annoying to unlock twice (lockscreen and THEN Wallet), which is what I believe how the system worked pre-Kit Kat, where you needed the app open. If you only need the screen on and in lockscreen, then the process is somewhat better, although Apple's a bit better without you having to turn on screen at all.

The reason why I felt like NFC Payments were overrated in the past was because you needed the app open and in focus previously, which is just more annoying than anything else. Funny thing is in NYC my friend and I were fighting for the cab bill, and because I had to type in my PIN for Wallet, she beat me out with swiping her card.

 

[WelshBloke]

I think that in principle Apple Pay should be easier than a real wallet. The difference between Apple Pay and Google Wallet is that your phone screen doesn't even need to be on for Apple Pay.

Interestingly enough I got it to initiate at McDonalds, I scanned my fingerprint and then it told me to hold near the scanner again, but could never pick it up. Maybe its my case? Anyway, I completed the transaction using Google Wallet.

How are either of them easier than a contactless payment card?
You literally just have to tap the reader with the card.
There's no logging in, no scanning fingerprints, no worries about your card running out of batteries...

 

[ControlD]

How are either of them easier than a contactless payment card?
You literally just have to tap the reader with the card.
There's no logging in, no scanning fingerprints, no worries about your card running out of batteries...

I'm with you on this one. It seems like one of those things they are telling us we need without showing why we need it.

I guess maybe I can see the security issue .. maybe. Even that is stretching things. If I am out and about I already am required to have my wallet with me, so my card will be with me as well.

One thing to note is that I have never once in my life seen a contactless credit card. I'm not sure I even know what a reader for such a device looks like. I feel like I have been missing out on something, but chances are my area just doesn't have those devices. I have never been offered such a card from any financial institution either.

 

[mosco]

How are either of them easier than a contactless payment card?
You literally just have to tap the reader with the card.
There's no logging in, no scanning fingerprints, no worries about your card running out of batteries...

This is my point. The only real difference is security.

 

[mosco]

I guess maybe I can see the security issue .. maybe. Even that is stretching things. If I am out and about I already am required to have my wallet with me, so my card will be with me as well.

It's debatable whether the finger print requirement proves to reduce fraud. However the great thing about Apple Pay is the tokenization and one time use card numbers. It helps protect against the hacks that happened to Target, Home Depot, etc.

Apple Pay can also be used within iOS apps, which I think it great too. For example, in the Uber app, you can use the service without even creating an account. You just request a ride, and then pay with Apple Pay, and Uber never sees your card number.

 

[WelshBloke]

One thing to note is that I have never once in my life seen a contactless credit card. I'm not sure I even know what a reader for such a device looks like. I feel like I have been missing out on something, but chances are my area just doesn't have those devices. I have never been offered such a card from any financial institution either.

Go to London, that's how you pay for the buses there. They don't take cash. Its contactless credit/debit card or prepaid contactless oyster card or you walk.

 

[kaerflog]

Any form of payment that doesn't take from my CC is useless to me.
I earn too many pts and perks from CC and they get nothing from me.

 

[Suspicious-Teach8788]

How are either of them easier than a contactless payment card?
You literally just have to tap the reader with the card.
There's no logging in, no scanning fingerprints, no worries about your card running out of batteries...

For one I have to open my wallet, take it out the card? I mean that's about as easy as pulling out an iPhone and putting it on the reader. The thumb thing is practically instant.

I'm saying its close. Google Wallet's still got one more step in turning on the screen. Oh and sorry, we practically dont have any contactless payment cards in the US anymore, so yeah, we still gotta swipe.

With that said though, the idea behind mobile payments is that I'd like to lighten the load in my wallet. I have 4-5 different cashback cards that I carry depending on what purchase I need. I like the idea of a digital wallet where I can put my insurance card in there, my drivers license, etc, and NFC payments helps with that.

 

[Eug]

The thing is, I know more people using Android at this point than iPhones. I used to see iPhones EVERYWHERE, but now that big (but basic) Android phones are free or cheap ($99), I see a lot of non-technical people using them now. Most of my budget-oriented friends are using the Moto X type of phones. So with Apple limiting it to (1) only new phones, (2) only Apple devices (and not spreading it out to other non-Apple devices), and (3) taking a sizable cut of each transaction, I can see why retailers aren't too excited to jump onboard.

Most Android phones don't have NFC. Going forward, all iPhones will have NFC.

 

[npaladin-2000]

Most Android phones don't have NFC. Going forward, all iPhones will have NFC.

Actually quite a few Android phones have NFC now. And most iPhones don't. In fact, realistically, no iPhone has NFC. The iPhone 6 has a special NFC-like system usable only by ApplePay and no other apps at this time. If/When they open it up to other applications, then it'll deserve to be called NFC.

 

[dawheat]

Most Android phones don't have NFC. Going forward, all iPhones will have NFC.

I'd be surprised if any Android phone in the US outside of budget devices didn't have NFC. What was the last Samsung, Sony, Motorola, or HTC phone without one?

 

[openwheel]

err, most Android phones do have NFC, for years.
Apple is very late to the game. In fact, most iPhones don't have NFC (4, 4S, 5, 5S, 5C).

 

[WelshBloke]

For one I have to open my wallet, take it out the card? I mean that's about as easy as pulling out an iPhone and putting it on the reader. The thumb thing is practically instant.

If the wallet thing is that much of a problem just get a thin one and you don't even need to take the card out.
Its not just that the thumb thing takes longer (it does) but it makes the transaction more ungainly.
Imagine getting on to a crowded bus. Which is easier, slapping your wallet against the big yellow circle whilst walking on or placing your phone on the circle and then pressing the button on your phone?

I'm saying its close. Google Wallet's still got one more step in turning on the screen. Oh and sorry, we practically dont have any contactless payment cards in the US anymore, so yeah, we still gotta swipe.

Yeah it's close but the easiest one doesn't involve having to buy £500s worth of hardware to make it work.

With that said though, the idea behind mobile payments is that I'd like to lighten the load in my wallet. I have 4-5 different cashback cards that I carry depending on what purchase I need. I like the idea of a digital wallet where I can put my insurance card in there, my drivers license, etc, and NFC payments helps with that.

Which is great until your battery dies.

 

[Eug]

I'd be surprised if any Android phone in the US outside of budget devices didn't have NFC. What was the last Samsung, Sony, Motorola, or HTC phone without one?

err, most Android phones do have NFC, for years.
Apple is very late to the game. In fact, most iPhones don't have NFC (4, 4S, 5, 5S, 5C).

Most Android phones are budget phones.

Apple is late but it's extremely easy to tell which ones have NFC.

 

[openwheel]

When I drive up to a toll booth, I would be hesitant to hold my iPhone by the edge outside the window just to pay toll. If I lose my Amex, they Fedex it tomorrow morning, or I just use another credit card.

Everytime someone has to hold an iPhone in an awkward position to make payment is a disaster waiting to happen. There are enough clutter at my local Starbucks, let along kids running behind me at Target. One bump is all it takes to drop the iPhone. Now the phone is not only bent, it is shattered.

 

[openwheel]

This whole smart phone payment system is a disaster. Google Wallet, Apple Pay (name is mis-leading btw, it is really "iPay"), ISIS (really?), CurrenC.....are all money grabbing gimmicks.

Nothing is better than a Chip&Pin credit card at this moment. Nothing. As long as you have good credit and knows your finances, nothing beats it.

 

[basslover1]

Question for Google Wallet users: I just learned you can initiate Google Wallet from the lockscreen. Does that require you to unlock your lockscreen (if you have a PIN or pattern) or does Wallet initiate through the lockscreen so you ONLY have to unlock Wallet? It could be annoying to unlock twice (lockscreen and THEN Wallet), which is what I believe how the system worked pre-Kit Kat, where you needed the app open. If you only need the screen on and in lockscreen, then the process is somewhat better, although Apple's a bit better without you having to turn on screen at all

It's been kind of random for me, but most times I'm only required to have the screen on and not unlocked (I use pattern unlock). On some rare occasions I'll have to unlock the phone then unlock Google Wallet. I've never taken the time to discover why this happens though, because I don't want to be the moron holding up the line.

Sadly the only places around me that I've seen with NFC readers are CVS & 7-Eleven, which have disabled their readers, and McD's which I try to never visit but they still work.

 

[Eug]

Sadly the only places around me that I've seen with NFC readers are CVS & 7-Eleven, which have disabled their readers, and McD's which I try to never visit but they still work.

It's unfortunate that the US is so far behind in terms of contactless payments. Not only do Google wallet and Apple pay have to deal with competing standards, they also have to deal with the fact that most retailers don't even have the option for contactless payment.

In contrast, in other countries, contactless payment is the norm, but there is no Apple pay or Google wallet. I've been using contactless payment for many years now on a daily basis, but that's with credit cards, not with the phone.

Ironically, Apple pay actually works in those countries, if you have a US credit card that supports Apple pay. For example you can buy Tim Hortons coffee at your local coffee shop with Apple pay right now in Canada, but not if you're a Canadian with the Canadian credit card.