Apple Inc. (AAPL) Stumbles in Global Pay Roll-Out

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Apple Inc.  Pay was launched in September last year, which is Apple’s first attempt at having a mobile payments service of its own. However, the global roll-out of the service has not gone very well.


Soon after its introduction in the UK, it had to go through several problems on the London Tube and its adoption rate in the U.S. is also slower than expectations. Now, it’s facing trouble in Australia as the terms go sour with the banks there, says a report from Fairfax Media.

Tussle with Australian banks

Apple Pay allows users to make contactless purchases with the iPhone or Apple Watch. It had support from credit card firms like Visa, MasterCard and American Express at the time of its US launch in October 2014, and also in the U.K., where it was launched in July 2015.

The platform works only when the banks that have issued the credit card agree to get into a deal with Apple Inc. . In Australia, the big four banks are holding up the progress. Fees paid are the major subject of the tiff between the Australian banks and Apple says the report.

The earning per year of the Australian banks from the interchange fees, which is the fee that they charge from the merchants for using their payment infrastructure, is A$2 billion. They do not want to give a part of it to Apple, says the report. Banks in Australia charge lower fees than the ones in America. Therefore, they are not willing to give Apple a cut in that amount as of now.

Samsung Pay, Android Pay potential threat to Apple

Apart from the roll-out issues, Apple Pay is also facing a threat from rivals. Samsung is making a serious attempt to capture the digital-payment market with its Samsung Pay. This payment system from the Korean firm is unique in comparison with Apple Pay, which requires an upgrade by the retailers, while Samsung Pay allow the users to make payments with the legacy point-of-sale equipment.

Along with Samsung Pay, Android is another potential threat to Apple. Learning from the past mistakes, Google entered into deals with major firms since the beginning itself to expand the reach of its payment app.

Android Pay will work through the Visa, MasterCard, American Express and Discover payment networks. Several major banks such as J.P. Morgan Chase, Bank of America and Capital One, have plans of taking part in Android Pay.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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