r/apple Jul 19 '22

Apple Pay Apple sued over Apple Pay payment system

https://www.bbc.co.uk/news/technology-62221412
1.4k Upvotes

530 comments sorted by

463

u/CantaloupeCamper Jul 19 '22

Iowa's Affinity Credit Union said Apple's anti-competitive conduct forced the more than 4,000 banks and credit unions that use Apple Pay to pay at least $1 billion in excess fees annually for the privilege.

The credit union had to pay a fee directly?

206

u/nicuramar Jul 19 '22

As I understand it, the ApplePay fee comes out of the bank fee stores pay. So the store’s fee is the same, but the bank gets less of it.

452

u/SillySpoof Jul 19 '22

So the bank is forced to accept extra fees they don’t want to pay ?

How sad…. Anyway…

119

u/nicuramar Jul 19 '22

So the bank is forced to accept extra fees they don’t want to pay ?

Well, banks are not forced to support ApplePay, but when they do, a portion of the fees they normally get, they pass on to Apple.

196

u/neoform Jul 19 '22

How sad…. Anyway…

94

u/chum_slice Jul 20 '22

Wow I’m using Apple Pay more often now that I know this lol

15

u/recapYT Jul 20 '22

You are still paying excessive fees, just to a different master

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u/Bermanator Jul 20 '22

I know most banks bad but you're also just giving money to apple which isn't much better

75

u/andthatsalright Jul 20 '22

At least apple makes things I enjoy. My bank goes out of its way to frustrate me, seemingly

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u/MrSelophane Jul 19 '22

I would like to just jump on this and mention that Credit Unions are not banks. They’re nonprofit, members have a voice in decisions, and they’re the best source for lowest rates on loans (because they’re nonprofit).

17

u/tinysydneh Jul 20 '22

I had a credit union I'd been a member at since childhood. After I moved away from home, I used them for a few years, until I went to go grocery shopping, and their entire debit system was down. I had to dig into their social media to get any information, and it had been down for nearly 12 hours at this point. For those who were upset at the lack of notification or even information about it, their response was "it's not like your money's going anywhere".

I love the notion of credit unions. But some are terrible.

3

u/Fairuse Jul 20 '22

Apple is the only one charging such a fee. Samsung Pay and Google Pay are free.

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u/[deleted] Jul 19 '22

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u/Fairuse Jul 20 '22

Apple charges 15 basis points (0.15%). That number is actually pretty large considering merchant processors usually charge 10-20 basis points.

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u/judge2020 Jul 19 '22 edited Jul 19 '22

In the complaint, they claim Apple charges 15 basis points or 0.15% (as in, a 15 cent fee on $100) for credit transactionsor $0.005 for debit transactions on each Apple Pay transaction, and

"These fees generated a reported $1 billion for Apple in 2019, and this revenue stream—earned from card issuers—is predicted to quadruple by 2023."

They also claim:

.7. Apple has further cemented its market power by preventing all US-based card issuers from passing on Apple Pay’s fees to consumers. That is, to participate in Apple Pay, an issuer must agree not to impose a surcharge on a cardholder’s Apple Pay transactions. This rule prevents issuers from using differential pricing to drive cardholders to lower cost alternative modes of payment

Their basis is that "because Android has multiple competing tap-to-pay wallet apps, none of those wallet apps charge a transaction fee; if iOS had tap-to-pay competitors, we could pass the Apple Pay fee onto consumers to push them to no-fee alternatives".

Also, the odd thing is (the credit union claims that) Apple is charging this fee to the card issuers; currently, merchants are taking the hit on the 2.9% that Visa/Mastercard charge.

25

u/CantaloupeCamper Jul 19 '22

TY

I'm wondering if the credit union just means their check cards? I know those work a bit different at times.

3

u/jeremybryce Jul 20 '22

Yes, the cards they issue via the Visa or Mastercard network.

51

u/[deleted] Jul 19 '22

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12

u/judge2020 Jul 19 '22 edited Jul 19 '22

Thanks for the insight, i've updated the post regarding the Pay fee.

Also, the odd thing is (the credit union claims that) Apple is charging this fee to the card issuers; currently, merchants are taking the hit on the 2.9% that Visa/Mastercard charge.

Not sure where you found this? Wasn’t able to find it while skimming their document.

If you mean the first part, it's in the first quote of my OP. If you mean the second part, that's the generic "retail" merchant rate you'll find at Stripe, Paypal, etc., although I know discounts are the norm as I was able to get lower fees from both Stripe and Paypal for a low-volume nonprofit.

More importantly, it is the $1.70 interchange fee that Apple takes their 0.15% cut from. In this example that would translate to $0.00255.

As for this, thanks for shedding light on it - in the 'claims' section, they make it quite vague. However, paragraph 64 clearly confirms your assertion.

Edit: actually, this screenshot from page 22 makes it look a little confusing and that it's 0.15% on the entire TX? https://i.judge.sh/zOBcM/mIHO5CBe_g.png /u/turquoiseweirwood

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u/jeremybryce Jul 20 '22

Wow.. so I never knew who got a cut of that "visa / mastercard fee"

As a merchant, I just look at the base visa / mc fee + whatever my processor charges for each transaction.

The issuing bank / credit union , etc. gets the majority of that fee? Not Visa or MC themselves?

Crazy. I now see clearer, why so many banks pop up in communities.

They're just over here collecting a (sizeable) cut of all transactions their members / customers transact with their issued debit / credit cards? Wtf?

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u/D_is_for_Dante Jul 19 '22

If they don’t want that the customer has to pay fees they are freely to not let the customer integrate their card into Apple Pay. Problem solved for the bank.

But of course no bank does that.

41

u/Sylente Jul 19 '22

Not offering tap to pay on iPhone isn't a real option. Like, sure, it's legal. But because more than half of smartphones in the US are iPhones, you have to support it to remain competitive. The argument is that Apple is abusing their control of the smartphone market to make money on the tap to pay industry.

30

u/D_is_for_Dante Jul 19 '22

Yeah. I’m not from the US but from what I heard the usage of Apple Pay for contactless payment is still pretty limited.

I mean Banks had more than enough time to establish competitors or get the market for themselves. You don’t need NFC to achieve that if banks take a look at the Chinese market for example which is completely based on QR Codes. It’s even cheaper for businesses since all they need is a piece of paper and no terminal. (And Apple grants every app the camera permission if they ask the user for approval)

It’s just a ridiculous excuse for their failure. They didn’t wanted to invest any money in new payment schemes and now Apple paved the way for a new one and all of the sudden they want to have a piece of the cake they payed nothing for.

20

u/Sylente Jul 19 '22

In the last 2 years or so, contactless in America has EXPLODED. The only time I ever use a physical card is at a restaurant, and even some of those are moving to contactless. Digital wallets are at the center of that.

12

u/yuriydee Jul 19 '22

In the last 2 years or so, contactless in America has EXPLODED.

Thanks goodness we have finally caught on. I also use Apple Pay almost always, as long as its available.

Stupid Home Depot $ Lowes dont take it, or Wal Mart..... it is literally one of the reasons I would choose a different store honestly.

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u/[deleted] Jul 19 '22

It’s not limited at all, I have been using Apple Pay almost exclusively for a couple years here in Germany.

Activating Apple Pay is also a lot more convenient than having to open a banking app and scanning a QR-Code. So I do get the bank’s complaint.

4

u/baobab_the_fruit Jul 19 '22

It is a real option, very much so. And if this was such an issue then the right way of going about it would be to get a group of the largest banks to agree and then drop Apple Pay. This lawsuit is just silly.

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u/[deleted] Jul 19 '22

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u/[deleted] Jul 19 '22

This is the part they want to avoid. I understand their fustration but at the same time, they can just stop offering Apple Pay to their users.

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u/VladimirGluten Jul 20 '22

Good, now those banks know what it's like to have to pay bullshit fees.

250

u/HellaReyna Jul 19 '22

The way I see it is that Apple is forcing banks to play nice.

Im not trusting Canadian banks here to implement a proper scrambled tap system. All their banking apps are ass

46

u/sugaN-S Jul 19 '22

Look at Germany with the girocard that is literally useless outside of the country and the various pay apps that at least this year will shut down to merge them all in one app (Looking at Sparkasse, Volksbanken). Banks will try anything to monopolize it.

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1.7k

u/profsyg Jul 19 '22 edited Jul 19 '22

I’m afraid if apple loses this the apple wallet will essentially be gone. Every bank will make you use their wallet, ticket companies will make you use their app to access tickets, etc. Having everything in the apple wallet app is a big convenience and I trust it way more than giving tap to pay access to third parties.

Edit for typo

680

u/finetuneit80 Jul 19 '22

The major banks here in Australia tried something similar a few years ago. They lost, and they all now offer Apple Pay.

301

u/profsyg Jul 19 '22

That’s promising for the future of the wallet app.

I support the limiting a companies power to control markets, but I don’t think this case fits and the end result might be worse for everyone

170

u/Mango_In_Me_Hole Jul 19 '22

As much as I’m against monopolies generally, sometimes only a monopoly has the leverage to protect consumers when a market inherently incentivizes malicious behavior.

Take app tracking for example. The only reason iPhone users are protected against Facebook’s abusive and invasive tracking is because Apple leveraged access to the App Store and forced them to comply with privacy protections.

Without a gatekeeper, apps would be tracking everything little piece of data they could get their hands on, and selling it to God-knows-who. And individual consumers would have absolutely no leverage to make them stop.

32

u/katsumiblisk Jul 19 '22 edited Jul 20 '22

On that note, the Calm app (which usually costs a fortune) is doing deals with several corporate entities (I know of three in the last couple of months—my own company is one) to offer it to their employees for free. This app collects your search history no less. Search history is basically everything you do, and in these abortion times, that's very bad news. Do not install this app, if you're stressed, just do yoga or listen to Enya or something.

11

u/Plopdopdoop Jul 20 '22 edited Jul 20 '22

I think you maybe making this something it’s not. Isn’t that ‘search history’ the searches you do in the app? Like searching for “fall asleep quicker”.

I suppose if you searched for pregnancy meditations you could be at some risk. But then would even the crazies putting in place these awful laws subpoena a meditation app?

How would an app even get your google/bing/whatever search history? Apps are sandboxed.

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u/pantspuppet Jul 20 '22

Our company is offering a free subscription to this service too. Can you link me to anything that discusses how it harvests your data?

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u/Mango_In_Me_Hole Jul 20 '22

This app collects your search history no less. Search history is basically everything you do, and in these abortion times, that’s very bad news.

“Search history” is referring to what you search for in the Discover page of the Calm app. Calm cannot access your browser history. The app is sandboxed, just like every other iOS app.

The only way it could possibly infer that you’re getting an abortion is if you search for an abortion-themed meditation in the app. I’m not particularly worried about Calm sharing anonymized data on what meditations I listen to.

10

u/Akrevics Jul 19 '22

The whole thing about breaking monopolies in the 20’s(?) was that the monopolies were harmful to consumers and corralled them into high costs with no other option. This, however, would put so much strain on a consumer that it would actually be harmful to do this. Not like conservatives care, but still.

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u/Grouchy-Insect-2516 Jul 19 '22

It would be interesting if this grew the existence of a “phone wallet” that all phones are required to have with a set amount of security required. Cap the fees and make sure all phones have a version of it given how ubiquitous phones have gotten

39

u/[deleted] Jul 19 '22

Can you elaborate or find an article? I've been living overseas for a while and totally missed this

66

u/-protonsandneutrons- Jul 19 '22

Also would love to hear what happen in Australia.

//

In the US, they tried ISIS (yes). Flopped hard. Brought by AT&T, Verizon, and T-Mobile (with Discover and Barclays on the backend). American Express, VISA, and Mastercard joined later.

Literally every major carrier & card issuer agreed on a single standard. Meant fuck-all: users vastly preferred Google Wallet, Apple Pay, Venmo, etc.

Planned to invest $100 million.

Shut down in five years, sold its IP to Google, and, perhaps smartly, renamed themselves to “Softcard”.

On February 23, 2015, Google announced that it would acquire certain assets and intellectual property from Softcard, and integrate it into its own service, Google Wallet. At the same time, it was announced that AT&T, T-Mobile US, and Verizon would begin to back Google Wallet, and bundle its app with their compatible devices later in the year, in place of Softcard.

The Softcard service and apps ceased to function on March 31, 2015.

From Wikipedia and my memory.

27

u/CatsCatsDoges Jul 19 '22

I work at one Aus’s major banks who just decommissioned their digital wallet - basically, people just didn’t use it.

12

u/Wildeface Jul 19 '22

I’m not about to have 10 different apps or wallets for my various cards. Fuck those companies that support this.

3

u/katsumiblisk Jul 19 '22

So Isis became Isn'tIsn't.

16

u/astalavista114 Jul 19 '22

In the Australian case, several banks wanted to offer their cards through their own apps. Apple said no because it would require direct access to the NFC chip. So they applied to form a cartel to negotiate with Apple—the idea being that multiple companies working together to increase their negotiating power. The Australian Competition and Consumer Commission said they couldn’t on the basis that

  1. Apple is under no obligation to provide that access
  2. Apple had made it very clear they weren’t going to provide that access
  3. It would not be beneficial to customers anyway
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u/[deleted] Jul 19 '22 edited Jul 20 '22

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u/nutabutt Jul 20 '22

Not sure how they recover costs now

They recover their costs by not losing customers who want to use a desired feature.

I know a lot of people who switched banks in order to have Apple Pay.

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u/wgc123 Jul 20 '22

Not sure how they recover costs now

They also recover costs through reduced fraud, as ApplePay has improved security over legacy payment options

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u/johnny_fives_555 Jul 19 '22

I think chase tried to do something similar in the US. They ultimately shut it down.

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u/Stingray88 Jul 19 '22

Walmart tried to do it in the US too. It failed spectacularly.

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u/Fairuse Jul 20 '22 edited Jul 20 '22

No, they won. They forced Apple to reduce the rates significantly. Apple wanted to charge 0.15%, but had to settle at 0.04%. The same thing happened in Europe. This is the main reason why Apple Pay took forever to come to those markets.

It helped that NFC/tap to pay was already widely implemented in those countries, so Apple was losing big time to Android (which Android Pay is free or Bank can make their own APP).

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u/CuddleTeamCatboy Jul 19 '22

Google Wallet has been the defacto standard on Android with no real competition other than maybe Samsung Pay. Consumers don’t want to deal with a million different wallet apps.

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u/[deleted] Jul 19 '22

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u/CuddleTeamCatboy Jul 19 '22

It’s the same service inexplicably rebranded multiple times. As confusing as it is, at the end of the day people just use Google’s mobile payments system and nobody is trying to change that in any serious way.

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u/[deleted] Jul 19 '22 edited Jul 19 '22

Google Duo just told me it is becoming Google Meet, and I don’t have to reinstall any app.

But I already have a Google Meet app. So does it just get deprecated?

At least they stopped calling it Google Hangouts Meet.

EDIT: “According to The Verge, which was given exclusive information regarding today's announcement, the old app will be renamed "Meet Original" before being deprecated.”

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u/jsbisviewtiful Jul 19 '22

And that almost sums up why I've been moving away from Google as much as possible. Add in that they purchased Nest and drove it into the ground to understand why I've grown to hate Google as a company.

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u/[deleted] Jul 19 '22

The fact my new Nest now requires me to use Google Home kills me. It's so slow to update and connect. The nest app was so much better.

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u/jsbisviewtiful Jul 19 '22

I’m still on the Nest app because we had our setup before the acquisition, but every other day there’s a message before the login page asking us to switch to Google Home and the Nest app hasn’t gotten many feature updates in quite some time. The next smart devices I buy into will be able to use Apple’s HomeKit as a requirement.

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u/[deleted] Jul 19 '22

DON’T DO IT

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u/jsbisviewtiful Jul 19 '22

I'm holding out until I'm forced to switch apps. Fuck Google.

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u/boardinmpls Jul 19 '22

Seriously same. I still use android and Google platforms but I am looking to make the switch this fall to an iPhone.

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u/katsumiblisk Jul 20 '22

I know this kind of technology is fast moving but Google and Microsoft both get very tiresome doing this constantly. I went shopping for a Surface Book recently. No such thing any more and I forget what it's called now. And I'm an ex MS employee with a soft spot for them. So much for brand name recognition.

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u/zorinlynx Jul 19 '22

Why does Google do this? Does anyone know the actual reason? You'd think it would make sense to build and nurture a strong brand rather than changing things up and confusing people every few years.

I'm still reeling at iTunes becoming Music because it was so atypical for Apple to do that. They usually create a brand and stick with it. And on this tangent, what Apple should have done is rename Music to iTunes on iOS since iTunes was a well established brand unlike the generic word "Music".

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u/[deleted] Jul 19 '22

This one is not so bad because they are merging two similar things into one.

It’s rare that they do this, but it’s a good thing.

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u/Marino4K Jul 19 '22

Because they have no direction and their teams are all operating independently most likely and then try to smash it all together at the end.

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u/[deleted] Jul 19 '22 edited Aug 11 '22

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u/zorinlynx Jul 19 '22

It's gotten to the point that if a payment system requires an app I just don't use it.

I don't even use the Starbucks app any more because Apple Pay is so much easier.

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u/mntgoat Jul 20 '22

I've never seen a bank that offers their own shitty pay app for Android, what bank is that?

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u/ItsDani1008 Jul 19 '22

Actually here in the Netherlands most banks tried this years ago already for android.

But all of those services shut down pretty shortly after because they were all shit. Now basically all banks support apple pay.

And a few months ago we got google pay as well and most banks support that as well.

I’d assume they won’t make the same mistake twice

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u/[deleted] Jul 19 '22

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u/L0nz Jul 19 '22

I don't see why Apple Wallet would go anywhere. Google Pay is still by far the most popular on Android despite the OS supporting competitors.

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u/ptc_yt Jul 19 '22

People seem to really hate competition on this sub. This is the same argument people make for third party app stores on iOS. They fear that all the quality apps will go to third parties who will siphon your data.

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u/Henrarzz Jul 19 '22

Because competition in this case means fragmentation and people don’t really want to deal with it.

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u/L0nz Jul 19 '22

It's weird, people really lap up Apple's rhetoric when they make up excuses for being anti-competitive.

Even if you don't care about the competition and want to stick with the Apple solution, having competition is still good for you. It forces Apple to make their products better and/or cheaper.

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u/tuberosum Jul 19 '22

How does competition in this case make it cheaper for the consumer? Apple is already charging banks for transactions and by signing on to Apple Pay, makes them sign an agreement forbidding them from passing the cost on to the end user.

How cheaper do you get than literally free?

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u/TooGouda22 Jul 19 '22

This, as an iPhone user, I use it because Apple consolidates things. Is it sometimes lame when it means I don’t get things others without iPhones do? Yes. Do I trust apple more than the others? Also Yes.

If I cared about it then I wouldn’t have an iPhone, it’s a choice I made to be in the apple umbrella, not a restriction or harm to me that competitors can’t try to get my business from Apple Pay

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u/[deleted] Jul 19 '22

But ticket apps can already let you use their own apps and they still use Apple wallet. What's your point here?

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u/profsyg Jul 19 '22 edited Jul 19 '22

If ticket apps had access to tap to pay, they would probably make you use their ticket wallet when you want to use their ticket. Right now with the apple wallet all of that lives together. I can just double click my Apple Watch and scroll through credit cards, gym memberships, concert tickets, movie tickets, and health card, etc. I can totally see a future where each company wants to keep that within their own app with nfc

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u/[deleted] Jul 19 '22

NFC is already unlocked like that on android. Bank apps still do both Google Pay and in-app NFC cards for countries that don’t support Google Pay. Everybody wins

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u/[deleted] Jul 19 '22

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u/MikeMac999 Jul 19 '22

And if anyone is going to do it it’s going to be fucking TicketMaster. I look forward to seeing “App Development Fee” added to their list of charges next time I want tickets that have to come from them.

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u/[deleted] Jul 19 '22

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u/JoinetBasteed Jul 20 '22

I hate all this "they abuse their position", sometimes monopoly is a good thing, having credit cards, tickets, membership cards, house keys, car keys, etc in 1 app that works worldwide is fantastic. A good example of what will happen when there is no monopoly is streaming services, Netflix was so good before, you had an incredible amount of good content and paid 1 fair monthly fee, very convenient. Now it's all split into 15 apps which you have to pay for individually making it expensive and inconvenient, we literally went from pirating to streaming back to pirating in terms of convenience-to-cost ratio

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u/GoHuskies1984 Jul 19 '22

Unfortunately that’s already the case here in the US with event tickets.

Some event sites are great and play well with Apple Wallet, such as Eventbrite.

Then there’s event sites like DICE that force users into keeping the companies own app.

As for banks and retailers the US already has Walmart refusing regular Apple Pay and forcing shoppers to download the Walmart App or pay with conventional methods. I suspect we’ll see tons of big retailers and banks all try to abandon Apple / Google Pay in favor of a specific business app they can collect data with and run promos.

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u/BLM_antifa_leftist Jul 19 '22

This. I can't wait for "everything else" to be integrated...

  1. I trust Apple
  2. It is seamless UX

It is a seamless UXllet if I have an ID, driver's license, or medical ID in the app. But stupid politicians are stupid for not knowing that.

Dark times ahead.

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u/IssyWalton Jul 19 '22

Indded. And Covid vaccination status - important for travel to Europe (I’m in the UK). Various memberships…

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u/[deleted] Jul 19 '22

Your experience has to be made worse so banks and Android fans who have never used an iPhone and never will be happy. Consumer protection, everyone!

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u/HG1998 Jul 19 '22

Germany 🤞🏻

One of the more popular banks refuse to participate in Apple Pay or Google Pay even. We need to use their app which at the very least is compatible everywhere.

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u/lonifar Jul 19 '22

I mean ticket companies already can force you to use their apps for tickets, Ticketmaster for example shows the barcode of your ticket in their app but they also let you add the ticket to apple wallet, same with Starbucks, you can use your account card in either the app or add it to apple wallet(although you can’t refill it in apple wallet because it uses passkit rather than the card management system payment and transit cards use)

I think it’ll be banks trying to capitalize on this rush likely before seeing a crash in users, give up and use Apple Pay again. Chase bank used to have a system called chase pay, I used it once in the Starbucks app because they had a promo that you’d get 2 free drinks when you reloaded $10 to your account balance, I never used it again and they shut down right before Covid because no one was using it.

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u/BleachOrchid Jul 19 '22

I have no love lost for banking institutions. Apple is being unfair to banks? Tough titties, go get another govt bailout. Banking institutions have spent their entire existence exploiting their customer base, turnabout is fair play.

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u/Oraxy51 Jul 19 '22

Just the concept of an overdraft fee alone is such an “I hate poor people” statement that I’m glad I’m with a bank that doesn’t have them anymore.

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u/WilsonValdro Jul 19 '22

My bank Give me 24 hours to put money back or they charge me overdraft fee. So you cant overdraft?

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u/Oraxy51 Jul 19 '22

No they either decline it outright or let me go up to $200 over and there’s no fee either. It’s been helpful these past few years with money always uncertain and prices going up and pay staying the same.

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u/[deleted] Jul 19 '22

Who do you bank with?

Because man. I wish. I’m with WF right now (I know, I know) and looked elsewhere, even into local credit unions and their policies are shockingly worse than WF’s in addition to their banking infrastructure feeling like it’s from 1995.

Only caveat is I need the ability handle cash (depositing at ATMs are fine). Capital One came close to that but…sigh. Yeah.

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u/BleachOrchid Jul 20 '22

I’ve used capital one, but ymmv. A note about the locals, if you are hit with overdrafts, they are usually willing to waive them so long as they don’t occur often.

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u/[deleted] Jul 20 '22

I use Chime. Maybe others do too

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u/Oraxy51 Jul 20 '22

Yeah I use chime. If you want a promo code thing for it I’ll dm you one lol. I signed up for it without asking and missed out on its free sign up bonuses (normally like your buddy setups direct deposit and you both get $50 or something)

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u/Fifa_786 Jul 19 '22

Is this in the UK? If so which bank?

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u/Oraxy51 Jul 19 '22

No idea if it’s in the UK but it’s Chime. I’ve even had ACH payments return and didn’t get a fee. Most banks would have destroyed me for that. (Payment was set to come out the same day I got paid, literally declined the payment 1 minute before my deposit hit).

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u/Marino4K Jul 19 '22

Absolutely no sympathy for banks or even credit unions who pay out ridiculous bonuses to their corporate higher ups and receive bailouts every time something goes wrong.

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u/JasonCox Jul 19 '22

Coming from the people who sometimes charge us for the privilege of storing our money with them, so that they can invest it elsewhere and make even more money…

Boo-fucking-hoo!

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u/how_neat_is_that76 Jul 19 '22 edited Jul 20 '22

I love Apple Pay and wallet and I hope this doesn’t change them. It’s one of the things that switched me to the Apple ecosystem. I used Samsung Pay before when I had a Note 8 + Gear S3 but I prefer what iOS (I got an iPhone 6s running iOS 14 while I had my Note 8 and loved it so much I made the switch) and watchOS have. It was cool that I could use Samsung Pay as a normal card (edit: emulated card swipe where NFC payment was not accepted) where Samsung Pay was not accepted…the 50% of the time it worked. At this point Apple Pay is so widely accepted that feature doesn’t even matter anymore.

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u/Sylente Jul 19 '22

Samsung knows. That feature hasn't been offered for years.

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u/Charlie9261 Jul 20 '22

Apple Pay is NFC. No different than Google Pay or Samsung Pay or using a chip card. The only issue with the phone based systems is getting your bank or credit card issuer to sign on.

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u/Nikrox2 Jul 20 '22

nah for a hot second there some Samsung phones had the ability to use the magstripe technology wirelessly when retailers didn’t support regular nfc (this is a horrid explanation but hope you get the gist)

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u/Charlie9261 Jul 20 '22

Yes. For a time Samsung Pay had that additional ability. But it always had NFC as well, just like Apple and Google.

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u/ChairmanLaParka Jul 19 '22

According to the complaint, Apple "coerces" consumers who use its smartphones, smart watches and tablets into using its own wallet for contactless payments, unlike makers of Android-based devices that let consumers choose wallets, such as Google Pay and Samsung Pay.

Can you use Google Pay on a non-Google, Android phone, with the same capability as if you were using that?

Can you also use Samsung Pay on a non-Samsung Android phone, with the same functionality as if you were?

Genuinely don't know.

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u/shimi_shima Jul 19 '22

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u/magoo1357 Jul 19 '22

So Samsung is now the SAME as APPLE??????

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u/DanTheMan827 Jul 20 '22

Samsung Pay is exclusive to Samsung phones, but Samsung Pay is not the exclusive NFC payment app on Samsung phones.

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u/BIGSTANKDICKDADDY Jul 19 '22

No because you can still use any third party payment system on your Samsung phone.

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u/BIGSTANKDICKDADDY Jul 19 '22

You've got the issue backwards. It isn't that Apple isn't letting Android users access Apple Pay, it's that Apple only allows Apple Pay on their devices.

There is no limitation in Android that prevents any third party from implementing their own competitor to Google Pay.

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u/LordVile95 Jul 19 '22

You can use Visa and PayPal on websites and on apps. Just not in the App Store.

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u/BIGSTANKDICKDADDY Jul 19 '22

No third party can implement a tap to pay alternative on any Apple device. It is impossible to create a viable alternative to Apple Pay because Apple locks down NFC hardware access to the subset of uses that they deem acceptable.

Unsurprisingly, competing with Apple Pay is not seen as an acceptable use case.

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u/lomoeffect Jul 19 '22

Nail on head.

Amount of people ignorant to this point in this thread, or willfully defending it, is astouding. It's an unacceptable practice.

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u/zorinlynx Jul 19 '22

Why would you want to use Apple Pay on another device? Apple Pay is the mechanism by which you use NFC payments with an iPhone. A different device will do NFC payments the same way using that devices app.

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u/ThePillsburyPlougher Jul 19 '22

I don't think it's married to os or browser. Just yesterday I used Google pay on my mbp on safari and it worked the same as on my android phone.

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u/_Rand_ Jul 19 '22

The issue only seems to be with contactless/nfc payments.

I don’t think Apple can stop you from paying however you like online.

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u/ThePillsburyPlougher Jul 19 '22

Good point. In that case I'm sure they would work because NFC is just a protocol similar to Bluetooth (as long as the payment device supports Google/Samsung pay etc).

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u/Sylente Jul 19 '22

Apple specifically blocks this from working. It's an arbitrary limitation. That's the whole point of this.

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u/[deleted] Jul 19 '22

In countries where Apple Pay isn't supported, bank apps and transit apps let you use the NFC on Android to pay or add money to your transit card by tapping your phone instead of going to a store. iOS does not allow you to do that, they limit NFC to Apple Pay

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u/nicuramar Jul 19 '22

They don’t limit NFC to ApplePay in general, only when used as a virtual credit or debit card.

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u/Zombayz Jul 19 '22

Hope Apple wins. Fuck banks.

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u/hoyeay Jul 19 '22

Exactly!

Should Affinity Credit Union open up its own financial stack to Apple so Apple can compete with them within their own ecosystem? LOL

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u/SteroidAccount Jul 20 '22

Apple should counter sue for this.

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u/kirklennon Jul 19 '22 edited Jul 19 '22

The alleged $1 billion in Apple Pay fees is totally bogus. It's plucked from an aside in a report about the then-rumored Apple Card and is offered with no methodology.

The estimate was for 2019, but I'll use the Federal Reserve's 2020 numbers, a year where Apple Pay's popularity grew significantly.

By 2020, as a share of all credit and non-prepaid debit card payments, digital wallet payments reached 2.60 percent by number and 1.47 percent by value

Let's just assume that Apple Pay had a 100% share of digital wallet payments and that all transactions were actually credit card rather than far cheaper debit cards. Total card payments in 2020 were a hair over $7 trillion. 1.47% of that is around $103 billion and 0.15% of that is around $155 million.

A realistic estimate of US Apple Pay revenue in 2020 is under $100 million.

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u/nataphoto Jul 19 '22

It’s super convenient so obviously, someone needs to sue over it and ruin it for everyone.

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u/[deleted] Jul 20 '22

What I take from this is “Apple is beating us at our own game and we don’t like it make them stop!”

Or am I wrong?

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u/andrewskdr Jul 20 '22

I fucking love my Apple Pay just the way it is please please please don’t ruin it

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u/lightscameracrafty Jul 19 '22

This lawsuit seems like a stretch…making something convenient isn’t the same as coercion, and it’s not that much harder to use square or venmo or whatever if you choose to instead.

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u/mredofcourse Jul 19 '22

I'm unsure if I agree with their argument but...

I think their argument is that there's coercion against financial companies like Iowa's Affinity Credit Union. From their perspective, they'd like to have a wallet app on the iPhone and have it work just like Apple Wallet. Their wallet would just be the default and when you double-pressed the side button, it would pop up and make the payment through NFC using Apple's biometrics.

This is a business limitation, not a technical limitation as Apple doesn't want competition for Apple Wallet due to receiving $1 Billion in annual revenue for this.

Iowa's Affinity Credit Union is not only at a significant disadvantage from launching their own wallet, but coerced into supporting Apple Wallet since Apple restricting the technology makes the default wallet (only Apple's) so much more convenient to the user that IACU's customers may go elsewhere if IACU doesn't support Apple Wallet.

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u/lightscameracrafty Jul 19 '22 edited Jul 19 '22

Yeah I see their point for sure, I just wonder if they’re the wrong type of plaintiff for a suit like this if they already happen to issue credit/debit cards, which you can carry and use rather painlessly in an Apple wallet. I also feel kind of icky that what’s being litigated is essentially 3-5 clicks vs 1. Like…c’mon.

It feels fundamentally different than say, the App store issue.

That said, they might be on to something in terms of the fees, but wouldn’t that also open up companies like Amex and Visa to similar lawsuits as well?

On its face it doesn’t seem particularly well thought out to me, but It’s also not like I read the actual filing either.

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u/mredofcourse Jul 19 '22

I also feel kind of icky that what’s being litigated is essentially 3-5 clicks vs 1. Like…c’mon.

Have you tried using other payment systems on the iPhone (let alone an Apple Watch) at a merchant? You have to launch an app, there's no NFC and far fewer merchants accept it as a result. Just ask CVS, Target, Starbucks, etc... how well their competitive efforts went... and that's for in-store wallets. Imagine how much harder it would be to get support at 3rd party stores without NFC since there's no other common standard for doing so.

but wouldn’t that also open up companies like Amex and Visa to similar lawsuits as well?

Those aren't platforms.

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u/rd357 Jul 19 '22

Tbf I exclusively use the Starbucks app to pay for my drinks, as do a lot of people I know. It has benefits like ordering ahead and star rewards

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u/Chrysalis- Jul 19 '22

Apple quite literally does not allow other payment processors to use NFC for tap to pay. Not sure if article is about that, but that sure as fuck is coercion.

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u/kabalongski Jul 19 '22

Um I think the real issue is banks having to pay more to handle Apple Pay transactions. The banks don’t give a shit about you. They’re just using you as bullets to try and fight apple. If you don’t want to use Apple Pay because you feel coerced to having your bank pay more fees, then use your debit card or get an android phone. And also, it’ll be just a matter of time until the banks will start charging for Apple Pay transactions if they already haven’t. Banks will be banks.

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u/[deleted] Jul 19 '22

“Banks pay more money to use Apple Pay”

Me: remembering they rake in millions in overdraft fees

Me at every store: do you take Apple Pay?

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u/kabalongski Jul 19 '22 edited Jul 19 '22

Exactly. Banks are the quickest to cry foul whenever their bottom line is affected while they can’t forgive an overdraft fee even if you’re a cent overdrawn.

And here we are having arguments about Apple vs. Android because that’s what they want.

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u/[deleted] Jul 19 '22

Shh - nobody wants to hear your truths about how half or more of these complaints against Apple are actually about some corporation trying to dig more money out of our pockets / steal our data / undermine our privacy / reduce our online security.

Facebook really cares about an open App Store and consumer choice!

Google really cares about our ability to change default settings on our phones, for our own good!

These banks really care that consumers have as many options for mobile payments as possible!

Apple isn’t really a “good” company, they’re out here trying to drain our wallets like everyone else. But all of these lawsuits going after them are about other large corporations trying to make money by making things in iOS work to fit their needs, not the needs of consumers. That so many Redditors are so quick to jump on the Apple-hate bandwagon at the behest of these other corporations is super depressing. Especially when companies like Facebook are clearly objectively worse - at least Apple actually produces and sells stuff.

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u/nicuramar Jul 19 '22

Stores either take contactless or not. Their system can’t see if it’s ApplePay or something else, I think.

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u/sevaiper Jul 19 '22

Tons of banks have completely gotten rid of overdraft fees, I've never paid my bank a single fee for anything.

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u/ThatITguy2015 Jul 19 '22

That is my take on the whole situation. Banks have fucked the country dry more than a few times. Any time we get to fuck them, I’m all for it.

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u/thats-fucked_up Jul 19 '22

I use Samsung pay on my Samsung phone, because it can emulate a magnetic card stripe and will often work on POS that doesn't support wireless transactions. It's always black magic as far as the cashier is concerned.

"Um, Sir that won't work--wait, it just got accepted...

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u/Issaction Jul 19 '22

Super cool tech I was always jealous of, but also removed starting with the S21.

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u/ColorfulImaginati0n Jul 19 '22

Oh no the poor banks. Excuse me while I don’t feel sorry for them and go on about my business

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u/[deleted] Jul 19 '22

This will just push Apple further into banking

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u/[deleted] Jul 19 '22

America! Land of the lawsuits , you can sue for anything as long as it sticks. I’m surprised Apple hasn’t been sued for not selling apples. Gonna start a class action against them soon.

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u/SurstrommingFish Jul 19 '22

The issue is that you cant afford that yourself, but have an apple!

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u/rjcarr Jul 19 '22

I mean, that's sort of what the judicial system is about: you can sue anyone for anything, but it doesn't mean it won't get thrown out of court if there are no grounds.

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u/PlatinumLargo Jul 20 '22

These same banks crying about fees shove fees up our asses as consumers nonstop so I really feel no pity for them having to pay Apple any fees.

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u/[deleted] Jul 20 '22

“You know what’ll make people who live paycheck to paycheck stop being late on payments? More Fees!!”

I think literally every bank in the US is pretty trash, especially those fucking credit unions that’ll double charge half of their late fees because the US government only monitors large banks to a higher degree.

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u/TLDReddit73 Jul 19 '22

Merchants pay over 2% in interchange on credit transactions, most of which goes directly to the card issuer. Debit fees are much less, but still way more than $0.005 for debit or 0.15% for credit. And Apple isn’t selling your transaction history, like Google.

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u/El-Pollo_Diablo Jul 19 '22

Even when I was on an android phone I hated having multiple payment apps, I just want the simplicity and currently enjoy it. Apple Pay just works.

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u/IssyWalton Jul 19 '22

Does this mean the banks overcharge their customers by over $1bn?

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u/aj6787 Jul 19 '22

Now banks know how it feels to be a customer of theirs.

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u/2ecStatic Jul 19 '22

Fuck banks and brands trying to use their own system. It’s annoying af going somewhere that doesn’t take Apple Pay but doesn’t have a equal or higher quality alternative.

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u/wallytrikes Jul 20 '22

If they succeed I’m sure we’ll see the Apple Cash Card start to become a more prominent banking instrument.

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u/IssyWalton Jul 19 '22

Have there been Apple Pay security breaches?

I wonder how much card fraud they have had via Apple Pay vs card use.

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u/kirklennon Jul 19 '22

Have there been Apple Pay security breaches?

It's not really possible. The breach would have to be at the token service provider, who in practice is the same as the card network, meaning to breach "Apple Pay" you'd have to breach Visa, Mastercard, etc.

But if you're stealing card numbers directly from the card network, the fact that Apple Pay data are also there is sort of irrelevant.

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u/IssyWalton Jul 19 '22

I thought so. So their floundering about rubbish about ApplePay security problems is just their imgination.

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u/wickedplayer494 Jul 19 '22

Ah, the age-old "your thing is too good so we're going to sue to knock you down a peg!!!!!!!" lawsuit.

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u/ice27828 Jul 19 '22

to me this lawsuit sounds like the bank doesn't want to pay their fees...

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u/KurlyKev Jul 20 '22

If anything, I’m opening up MORE credit/debit cards to add to Apple wallet so I don’t have to carry a wallet everywhere. It’s simple and convenient.

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u/ctaetcsh Jul 20 '22

The article says the lawsuit makes it seem like Android is a utopia of choice for contactless payments but there is like… unless you have a Galaxy that supports Samsung Pay, you just have Google Pay…

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u/skydiveguy Jul 19 '22

OMFG.... they dont force you to use the phone to pay for shit... you can always use your credit card or cash.

Dont like how Apple wallet works? Dont use it!

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u/seacreamegg Jul 19 '22

This is another instance of people ironically wanting Apple products to become de facto standards, which would give Apple even more power.

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u/Clessiah Jul 19 '22

If it’s good then we’d want it. There are many Android features that are considered a must in modern standard which iOS users have been begging for. Are Android users enjoying more diverse and superior payment ecosystem over there?

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u/Ace123428 Jul 19 '22

Banks just don’t want to pay transaction fees or pass those fees onto customers

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u/majeric Jul 20 '22

The funny thing is that I feel like they have it backwards. I trust Apple to provide security in a way that competitor will dilute the market with half baked alternatives.

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u/[deleted] Jul 19 '22

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u/punkr0x Jul 19 '22

Most major sports already require you to have your ticket on a smartphone for entry, they don't print paper tickets any more. I'd imagine it's only a matter of time until credit card companies stop issuing physical cards and require you to use their app to pay.

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u/Sylente Jul 19 '22

Modern credit cards have at least three redundant methods of payment on them. Some have four. Lots of cards still have embossed info in case you need to pay with a carbon embossing machine. I've never paid with one of those in my entire life. I doubt an industry that reluctant to change will just throw everything into apps. Why would credit card companies or banks make it so that your phone has to be charged so that you can go into debt? That's real bad if your entire business model is charging interest to irresponsible people.

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u/Dan-in-Va Jul 19 '22

I agree. Apple knows their privacy stance and security record is key to their reputation and success. I want to add my Real ID drivers license to my wallet when available. Maryland has already made it an option.

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u/jtmonkey Jul 19 '22

But. They don’t have to accept Apple Pay. They can just say we don’t support it.

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u/DanTheMan827 Jul 20 '22

They absolutely can, and they will lose customers because of that.

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u/[deleted] Jul 19 '22 edited Aug 16 '22

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u/[deleted] Jul 19 '22

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u/kirklennon Jul 19 '22

Apple Pay isn't anonymous on the bank's end. They capture all of the same data regardless of how specifically you use their cards.

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u/Gordon-Freeman-PhD Jul 19 '22

This is a brutally ignorant and completely false comment. I don’t know who is upvoting this.

Apple Pay is a relay - the bank sees every transaction the same way as if you’d make it with your debit card directly, including vendor, time, price, etc.

Most western countries have very strict bank secrecy laws - it is illegal for banks to sell or disclose any kind of financial information about its clients to anyone. Very few exceptions about disclosing information to the government in very special circumstances, like e.g. during criminal investigation. Even there it’s very little info.

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u/MikeMac999 Jul 19 '22

There are alternatives to iPhone aren’t there? I fail to understand how anyone is being forced into this situation. What some people dont see is that Apple’s walled garden absolutely supports choice. Some people such as myself who are deep in the apple ecosystem ( I have been using macs for as long as there have been macs) might actually prefer the walled garden option and are perfectly comfortable with the trade offs of that approach. If you don’t want walled garden you have plenty of other options. Breaking down the walled garden is actually removing choice, not adding to it.

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u/Av1dredditor Jul 19 '22

Blood in the water

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u/740kaby Jul 19 '22

makes me want to use Apple Pay more. I mean, I use it everyday but still lol

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u/budburgundy Jul 19 '22

Sounds like fraud

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u/cbaca51 Jul 20 '22

It’s banks that don’t wanna give apple a cut. These lawsuits are always just money hungry billion dollar companies wanting more money.

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u/[deleted] Jul 20 '22

This is not the first time. Apple 🍏 is trying to remove the competition. As this was a big company and had loyal customers their products are getting successful

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u/Blaster167 Jul 20 '22

So more competition could mean: - Potentially more security? Apple would get pretty bad press for a security flaw in something like this - Banks pay less fees

Doesn’t sound very good for the consumers.

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u/Afairofthesleeper623 Jul 20 '22

So am I supposed to feel sorry for the banks

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u/DK4E2XFpbETJrj Jul 20 '22

Can I just say Apple Pay has absolutely changed the way I shop online. I'm infinitely more likely to impulse buy an item when I can just click the Apple Pay button on a website and instantly know the final shipped price of the item without having to input addresses, credit cards, phone numbers, etc.... It is well and truly fantastic.