Pay Apple should adapt its model in Europe – Les Echos

Rather than confront banks on their playground as were able to do other large non-bank players, the firm Apple has teamed up with them in the United States

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After the iPod for music and for the iPhone smartphone, Apple Pay Will it revolutionize the way we pay? The firm at the apple has in any case be likely to turn to its new payment system relegates wallets of American consumers to the status of museum objects.

The Power of Pay Apple has been targeted at how Apple integrates it across the Atlantic, in the ecosystem means of payment. Rather than confront the banks on their playground as were able to do other large non-bank players, the group led by Tim Cook chose to ally with them. He shows credentials by promising not to use the data of their customers. Even better, Apple promised to banks to help them manage fraud, now estimated at nearly four trillion dollars or 0.145% of the amounts paid by card. The fingerprint authentication iPhone 6, associated with a cryptographic method coordinates the credit card system, in fact reinforces Apple Pay security.

New Equation

In exchange, the group will donate a portion of commissions paid to banks issuing credit cards : around 0.2% of the amount of each transaction set via Apple Pay, which still leaves American banks between 0.3% and 0.8% of interchange fees in the manner of payment (debit or credit).

remains to be seen how this model fits this side of the Atlantic. “ The Apple prism appears totally American. Whether it’s commercial or security approach, this business model can be easily applied in Europe “warns Arira Gilbert, CEO of EIG cards. On the Old Continent, interchange fees are significantly lower impact, particularly in France where they represent only 0.28% of the transaction amount. This proportion therefore less room to share the cake with a new actor. And, even though most banks have already invested heavily in electronic wallets competitors Apple Pay.

Few scams France

Fraud is also smaller on the Old Continent, where the smart card doubled the four-digit code is much more secure than the system for reading the magnetic stripe. In France, it does not exceed 0.045% of card transactions, more than 30% less than in the United States.

What economic equation does Apple offer So -there banks in Europe? In France, they have not yet been contacted. But as complex equation as it is, “ Apple is a maker of standards “, recognizes a banker. In other words, it will be better to agree with him than against him.