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As expected Apple's 9/9 event caused plenty of fintech buzz. It's unknown what impact Apple Pay will have on merchants, banks and credit card companies, nevertheless, all three sectors have been preparing for Apple's new payments platform by creating dedicated teams with their own secret project names.
For the banks and credit card networks, Apple Pay could threaten some revenue streams, as the technology giant looks to assume a more central role in the financial universe. But the eager participation of banks and card companies suggests both Apple’s clout, and the recognition among financial institutions that they face broader challenges from upstart technology ventures, many of which are not as eager or willing as Apple to work with the incumbent financial industry. “There are schemes that don’t respect and honor the payment networks,” said James Anderson, the senior vice president for mobile product development at MasterCard. “We want to invest in programs that respect our role in the ecosystem.” The immediate cost of Apple Pay is expected to be assumed by the banks, which are offering Apple a lower rate than they normally accept from credit card transactions, according to people briefed on the agreements. The banks, which take the biggest chunk of credit card transaction fees, are hopeful that they will make up for the lower rates by processing new types of transactions that are currently being done with cash or other payment methods.
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