Google isn’t getting transaction fees from bank issuers, said people familiar with the situation. That is because Visa Inc. and MasterCard Inc., which operate the dominant payment networks, recently standardized their “tokenization” card-security service and made it free, preventing payments services from charging fees to issuers.
The rules may prompt changes in Apple’s agreements with banks. Some bank executives said they are unhappy with sharing fees and may use Google’s no-fee arrangement to try to persuade Apple to alter its deals. One possible leverage point: As Apple Pay expands outside the U.S., Apple may need to negotiate terms again. The bank executives didn’t want to be identified.
Alistair Barr and Robin Sidel
Hardly surprising, since the leading card companies are rolling our their own contactless payment solutions; they don’t want more competitors on the market, let alone companies charging transaction fees like Apple. Because of this, I suspect Apple Pay will look different when (if!) it rolls out across Europe. Contactless technology is probably the main reason why Apple Pay payments in the UK is said to be capped at £20.
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