All Aboard for Apple’s NFC Payments Launch (Sept. 8, 2014)
Apple’s new iPhone 6 to be announced tomorrow is almost certain to shake things up in the fledgling mobile wallets ecosystem, with an NFC-based mobile wallet that will debut with the support of major retailers, payments networks and banks. Walgreens, CVS, Disney, Nordstrom and Apple stores are said to be among the first retailers on board, using Apple’s Touch ID fingerprint technology to authenticate payments. Visa, MasterCard and American Express each have agreed to support the new wallet, as have several of the nation’s largest credit and debit card issuers, according to multiple reports. A spokesperson for Discover Financial Services declined to comment, but noted that Discover participates in multiple wallets as an issuer and a network.
Payments card issuers American Express, Bank of America, Citi, Chase, Wells Fargo and Capital One will support the new wallet, and will treat Apple mobile payments as card-present transactions, according to a report out today from equity research firm Keefe, Bruyette & Woods. Participating credit card issuers have agreed to a 10 percent discount off average interchange rates on Apple mobile wallet transactions. Nordstrom, Chase and BofA declined to comment on the reports; other retailers and issuers did not reply to requests for comment.
Apple’s NFC technology leap will have ripple effects beyond payments, sources say. Along with the iPhone 6, Apple is expected to unveil a smartwatch with NFC that could include payments capabilities, along with the possibility of a suite of health and fitness features. Apple’s NFC devices also may be configured to enable hotel room door access; Starwood Hotels and Resorts is among hospitality companies said to be integrating with Apple for this feature.
KBW notes that with Apple’s dominant market influence, its entry into the mobile wallet space puts pressure on existing mobile wallet ventures, including PayPal, SoftCard (formerly Isis) and MCX. Though Apple’s mobile payments move has been rumored for months, the giant’s commitment to NFC could turn the tide for mobile payments adoption “if consumers adopt digital wallets for convenience purposes,” according to KBW’s analysts.
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