[troad]

To be part of Apple Pay, banks have to enter into an agreement with Apple. Though the details of this agreement are generally confidential, it's fairly well known that there is an Apple cut, and that that cut is rather high. (It's Apple!)

The moment a bank has the option to extract itself from this arrangement, it will. Not just because there's absolutely no reason to give Apple a cut of the bank's own business if the bank doesn't need to, but also because the bad blood between Aus banks and Apple is very real at this point.

> Even if Apple opens up NFC payment, nobody will use them and prefer 1st party support like Apple Pay or Google Pay.

And since that costs the bank money, it won't be an option. Also, I think the bank would think of itself as a first party in a payment made using their card, and Apple as a parasitic third party.

I'm not saying people won't grumble, but there is no way - unless Apple actually makes Apple Pay somewhat attractive to banks - that the banks will continue to support it if they don't absolutely have to.

(I'm not siding with the banks on this, I'm just trying to lay out their logic.)

[dwaite]

I think it's just different math.

The 15 basis points Apple supposedly charges for with card payments from Apple Pay is meant to come from the fraud budget; that a biometric-based authentication is consider both more secure and easier to counter payment disputes. The rest comes from the convenience and hope that actually results in more card payments.

In the US where there's no PIN, fraud is high. Parts of the country are still heavily cash based, so there's a good margin to gain if added convenience results in more card payments.

For heavily credit card based markets with chip-and-pin, you have less fraud concerns and less to gain from convenience.

My take though is that even if apple opens up the NFC chip, they aren't opening up the Secure Enclave. So even if a bank app can take over the NFC chip, they still will have secrets in memory at some point without a new P-256 based payment protocol.

Unless this is a new app backed by a bank cartel, you'll also go from being able to use multiple cards to just one first-party card.

This all leads to my opinion of a pretty wonky situation - opening NFC up probably increases the value of Apple Pay, since it can now be compared to other software-based wallets by users, and Apple Pay support again becomes a differentiator for the payment card.

[astrange]

> My take though is that even if apple opens up the NFC chip, they aren't opening up the Secure Enclave. So even if a bank app can take over the NFC chip, they still will have secrets in memory at some point without a new P-256 based payment protocol.

The NFC chip is itself a secure enclave. (It's called a "secure element" but same thing.)

It does its own key storage, which is why it can work when the phone is turned off.

[troad]

> Unless this is a new app backed by a bank cartel

Good news - they've already got the cartel ready to go, and it's conveniently already in bed with the regulators! See https://en.wikipedia.org/wiki/BPAY & https://en.wikipedia.org/wiki/New_Payments_Platform

> This all leads to my opinion of a pretty wonky situation

Yep, that's sadly accurate for all the banks' other tech, so I see no reason they'd shy away from it here either.

I feel like you're coming at this from the wrong angle. No one is saying Apple Pay is bad, or that the banks' solutions will be better. The question is: will banks voluntarily give up a cut to a third party intermediary, when they can roll a slightly-less-convenient-but-good-enough tech stack and keep all the money for themselves?

One doesn't exactly become a top 4 bank by handing out a cut to intermediaries willy nilly. Even if the Apple cut were eliminated (unrealistic), the banks would need a very good reason to allow an intermediary between themselves and their customers at all.

[rswail]

The NPP is about removing the Visa/MC networks from the equation. It would also remove the EMV requirements, if I'm identified by my mobile phone number + biometrics linked to a bank account, which can have it's own credit line associated with it, why does the bank need to support Visa/MC?

The new payment platforms with instant settlement effectively remove the branding and merchant agreements that Visa/MC offer.

Person A can transfer money to Merchant M immediately, no intermediaries except the two banks/account provider and the payment platform usually run by the central bank.

[bigyikes]

Apple should buy a bank and compete on their own turf

[astrange]

Owning a bank is an extreme regulatory headache. You always want someone else to be the bank. Or even better multiple someone elses - in the US, small banks are allowed to do things large ones aren't, so you sometimes gather up a bunch of them and become a single proxy for them.

[gessha]

They probably won’t do that in the current antitrust climate. I hope the DOJ and the EU continue probing the big companies because I’m sick and tired of my non-ecosystem device choices not working well together.

[rswail]

Why would they want to be involved in a highly competitive and low margin business like consumer credit?