[PinguTS]

He is wrong. In fact Apple charges the banks: http://www.bloomberg.com/news/2014-09-10/apple-said-to-reap-...

Which makes sense, when you read the technical details published earlier today here on HN: http://clover-developers.blogspot.de/2014/09/apple-pay.html

[markonen]

Missed this completely, thanks! Updated the article.

[r00fus]

> He is wrong. In fact Apple charges the banks

The article you're linking to is not definitive. The source is anonymous and not confirmed:

"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."

[Justsignedup]

Banks make money from credit cards by

* charging a % from each transaction

* late fees

* interest on balances

This assumes banks make less money on transaction fees than they do on the other two when coupled with the potential for fraud... An interesting assumption...

[ssharp]

Is this how it works? My assumption was that Mastercard, Visa, American Express, and Discover were the ones that made the % of each transaction and then the issuing banks were the ones that made the money from fees and interest.

[dangrossman]

Most of the fees end up back with the card-issuing banks. That's how they pay for the rewards programs, and why the fees are higher for rewards cards than other types.

[nthj]

It's my understanding banks also charge a transaction fee (may be flat per-transaction rather than a percentage.) (Source: I work for an online ticketing company, so we deal with these types of things.)