Apple Said to Reap Fees From Banks in New Payment System
J Thoendell stashed this in Apps
Apple Inc. (AAPL) will reap fees from banks when consumers use an iPhone in place of credit and debit cards for purchases, a deal that gives the handset maker a cut of the growing market for mobile payments, according to three people with knowledge of the arrangement.
The iPhone 6 and iPhone 6 Plus, unveiled yesterday, include a new service called Apple Pay that lets users shop with the tap of a finger on a phone, instead of swiping a card. Banks including JPMorgan Chase & Co. (JPM), Bank of America Corp.and Citigroup Inc. (C) agreed to integrate their cards into the system.
Under deals reached with banks individually, Cupertino, California-based Apple will collect a fee for each transaction, said one of the people, who requested anonymity because terms aren’t public. While that gives the tech company a share of the more than $40 billion that banks generate annually from so-called swipe fees, lenders expect to benefit as consumers spend more of their money via mobile phones and other digital devices, the person said.
Stashed in: Apple