When Apple made their original Apple Pay announcement, a lot of people saw the road being paved for Bitcoin integration at some stage. However, several Bitcoin enthusiasts looked things more skeptically, as Apple Pay could very well become a major Bitcoin competitor. For those of you who are still on the fence, have no fear, as Apple Pay will not be a Bitcoin competitor any time soon, as the service might actually make the current financial system even worse.
Apple Pay has been hailed as the new “holy grail” of mobile payments, and no one is doubting the potential this service has to offer. Making in-store and online payments with your iDevice without needing to manually enter your credit card details is a major step forward for (e-)commerce. And with a ton of people owning some form of mobile Apple device, there is a huge market for Apple Pay.
However, Apple Pay is not all that great from a financial point of view. In fact, using Apple Pay to pay for any product or service, regardless of whether this is online of in-store, will be subject to additional fees. According to Rabobank, one of the major banks in The Netherlands, Apple wants 0.15% of each and every Apple Pay payment.
But who is going to pay that fee, you wonder? Apple wants to get their share of the transaction from the bank processing the payment directly. For example, if you have a credit card with Rabobank, Rabobank would then be charged with a fee of 0.15% of the transaction amount because you as a consumer used Apple Pay to pay for something.
While we can only applaud Apple for costing the banks money per transaction (how do you like them apples?), there is absolutely no reasons for customers to rejoice just yet. As you would expect from modern bankers, they will make sure these fees are covered by the customer first before they fork over money to Apple. To put it bluntly, consumers will more likely than not pay more than 0.15% in transaction fees when using Apple Pay. Banks have to make money to, you know.
Ronald van Aart, assistant-director of Rabobank recently stated: “The more players we have competing for the top spot on the food chain, the higher fees will become. Maybe banks would be better off allowing customers to use Apple Pay in exchange for a premium cost.” Needless to say,traditional banks would rather not compete with companies such as Apple or Google.
Another major concern is that banks will be scrutinized harder than companies like Google and Apple, despite all parties involved handling sensitive consumer data. Whether or not this will be the case remains to be seen, although we as consumers do feel that every company should be equally scrutinized as far as our privacy and data is concerned. Mega corporations should not get special privileges in that regard.
Regardless of how you look at the possible benefit of services such as Apple Pay, they are no direct competition for Bitcoin in the near future. Especially if these extra transaction fees are charged to consumers, there is no added benefit to using Apple Pay over Bitcoin. On top of that, retailers are not locking themselves into just one particular ecosystem (Apple), whereas Bitcoin works across multiple ecosystems (iOS, Android, Windows Phone), which could greatly expand your customer base.