There are times when some retailers are a little more reluctant to accept credit card transactions, namely because there is a transaction fee involved. This could be one of the reasons why some retailers are still holding out on the idea of mobile payments, but according to a new report from Bank Innovation, Apple has reportedly worked to mitigate that.
While Apple could not do away with transaction fees entirely, the report claims that they have managed to land deals with the likes of American Express, JP Morgan Chase, Citigroup, Capital One, and Bank of America where the transactions that would be made under their rumored mobile payment services would be classified as “card present” transactions.
This is opposed to “card not present” transactions which would command a higher fee. However in order to have a “card present” transaction, Apple would have to assume some of the risk, such as requiring the use of Touch ID to authenticate that the person using the phone is indeed the owner. The report goes on to note that Apple had even managed to lower the processing fees by 10%, thus making it more attractive to retailers and customers to use their services.
Given how Apple sort of turned the music industry on its head when they launched iTunes many years ago and also given their size and influence, we guess we can’t say we’re too surprised that they have managed to achieve this with the banks as well, assuming the reports are true. Either way we expect we will learn more on the 9th of September, so check back with us then for the details.