Apple Pay South Africa

Pho3nix

The Legend
Joined
Jul 31, 2009
Messages
28,760
Lol The real reason is the cut of interchange Apple demands. Its a gamble with FNB, SBSA and Capitec hoping that they won't lose too many clients and Nedbank, Discovery and ABSA hoping they gain more client spend revenue than the cut of interchange paid to the big fruit. FNB is vulnerable given their brand positioning as the smart, technology first bank, Capitec clients probably don't give a hoot in general and SBSA is in the middle. The real heat comes from the high end clients at SBSA and FNB who have no issue dropping 30k for a iFruit phone and can't use a key feature....until they jump ship to another bank.

This isn't the reason. Legacy issues as mentioned earlier .
At least for SBSA.. apparently*
 

johnjm

Expert Member
Joined
Jul 26, 2005
Messages
2,430
I suspect that would be a costly mistake, I really don’t see Apple users ditching their iPhones and Apple Watches for an inferior Garmin device outside the Apple/iOS ecosystem.

He was being facetious
 

rafiqs

Member
Joined
Jul 27, 2011
Messages
12
It is a small but highly confidential slice. Most issuing interchange (i.e. credit card 1.4%) is spent in the operational cost of running a card business and then funding loyalty schemes - come to think of it that may be FNB's problem.

Samsung and Garmin don't demand interchange and no surprise almost all banks support them. The Aussie banks when through a similar standoff with the iFruit until ANZ? opened up and the others saw their high net worth clients start to migrate. FNB should just dish out Garmin devices paid out of ebucks in the meantime ;)
Apple's fees aren't the problem for the banks.

One of the major costs for banks is fraud. Interchange costs used to be much higher during the magnetic swipe days. When chip-and-pin was introduced it reduced fraud and so the banks passed the saving onto the merchant by reducing their fee when the customer pays using a pin. If the customer swipes then the merchant still pays a higher fee to cover this added risk.

Now with Apple Pay, and the other "pays", it lowers the risk of fraud even more and this why Apple can charge for it. The merchant pays the same interchange fee as they do for normal tap-and-go and the banks are happy to cover Apple's charge because the risk of fraud on these type of payments is now even closer to zero than before.
 

Priapus

Executive Member
Joined
Jun 8, 2008
Messages
6,786
It is a small but highly confidential slice. Most issuing interchange (i.e. credit card 1.4%) is spent in the operational cost of running a card business and then funding loyalty schemes - come to think of it that may be FNB's problem.

Samsung and Garmin don't demand interchange and no surprise almost all banks support them. The Aussie banks when through a similar standoff with the iFruit until ANZ? opened up and the others saw their high net worth clients start to migrate. FNB should just dish out Garmin devices paid out of ebucks in the meantime ;)

iFruit?

What do you have against Apple? Do you think they should not be taking the smallest of small cuts from this payment interchange?
 

Tim_vb

Senior Member
Joined
Nov 7, 2008
Messages
537
Apple's fees aren't the problem for the banks.

One of the major costs for banks is fraud. Interchange costs used to be much higher during the magnetic swipe days. When chip-and-pin was introduced it reduced fraud and so the banks passed the saving onto the merchant by reducing their fee when the customer pays using a pin. If the customer swipes then the merchant still pays a higher fee to cover this added risk.

Now with Apple Pay, and the other "pays", it lowers the risk of fraud even more and this why Apple can charge for it. The merchant pays the same interchange fee as they do for normal tap-and-go and the banks are happy to cover Apple's charge because the risk of fraud on these type of payments is now even closer to zero than before.
This is what Apple tell the banks to put in their business case, the actual reduction in fraud is a huge guesstimate and no bank exec is happy to pay a cut of their revenue to a third party.

Maybe you know what each bank negotiated with the big fruit but this held back bank Aussie banks for years so its unlikely the smaller SA banks would SA banks be any different. SARB also continues to push down interchange through the interchange determination plan making Apple's slice an ever larger cut of interchange.
 

Tim_vb

Senior Member
Joined
Nov 7, 2008
Messages
537
iFruit?

What do you have against Apple? Do you think they should not be taking the smallest of small cuts from this payment interchange?

I think its best not to have an emotional investment in powerful corporations
 

Dave

Honorary Master
Joined
Aug 31, 2008
Messages
54,370
SARB also continues to push down interchange through the interchange determination plan making Apple's slice an ever larger cut of interchange.

The exact opposite happened in the EU, as the interchange rates were forced down Apple’s share went down as well, it’s why it’s significantly lower than the rate in the US.
 

Tim_vb

Senior Member
Joined
Nov 7, 2008
Messages
537
The exact opposite happened in the EU, as the interchange rates were forced down Apple’s share went down as well, it’s why it’s significantly lower than the rate in the US.
Could be, I would love to see if they negotiated a % of interchange or a fixed amount of bips per transaction. I doubt these are publicly available though
 

Hush9300

Expert Member
Joined
Sep 13, 2011
Messages
1,473
This is what Apple tell the banks to put in their business case, the actual reduction in fraud is a huge guesstimate and no bank exec is happy to pay a cut of their revenue to a third party.

Maybe you know what each bank negotiated with the big fruit but this held back bank Aussie banks for years so its unlikely the smaller SA banks would SA banks be any different. SARB also continues to push down interchange through the interchange determination plan making Apple's slice an ever larger cut of interchange.
Sure there were issues regarding interchange fees but that got settled. The major sticking point for the Australian banks at the time was Apple's refusal to grant them full access to the NFC chip to compete fairly with Apple Pay if I recall correctly.
 

Bobby01

Active Member
Joined
Jan 13, 2021
Messages
38
This discussion turned sour very quickly.

anyhoo.

Just had a chat with someone who is a integration developer at Discovery. Says Apple Pay is working flawlessly. No idea where some people here are saying “there are issues”. Other than a handful of failed transactions (failure rate of below 0.05%), everything is good. If that happens, people can just tap again or use their physical card.

Think FNB is just kak and falling behind with the times. They probably want people to use their 'home grown' solutions which they've spent millions building and just dont want it to be replaced by something better like Apple Pay.

Granted FNB was the most technologically advanced bank, but Discovery is coming to take a big slice of that pie with what I've heard they have in the pipeline. FNB couldn't even release a virtual card without stuffing it up....
 

CranialBlaze

Expert Member
Joined
Jan 24, 2008
Messages
3,320
This discussion turned sour very quickly.

anyhoo.

Just had a chat with someone who is a integration developer at Discovery. Says Apple Pay is working flawlessly. No idea where some people here are saying “there are issues”. Other than a handful of failed transactions (failure rate of below 0.05%), everything is good. If that happens, people can just tap again or use their physical card.

Think FNB is just kak and falling behind with the times. They probably want people to use their 'home grown' solutions which they've spent millions building and just dont want it to be replaced by something better like Apple Pay.

Granted FNB was the most technologically advanced bank, but Discovery is coming to take a big slice of that pie with what I've heard they have in the pipeline. FNB couldn't even release a virtual card without stuffing it up....

I think what FNB may fail to understand is a virtual card and Apple Pay, for the most part, reside in 2 different worlds.

Sure one can use Apple Pay online, but pretty sure it’ll be some time before our local merchants offer that.

For the most part Apple Pay resides out in the real world on our phones and watches.

Their virtual cards, which are reportedly not working so great, are useless at PnP, Woolworths, Engen, etc.

They useful for takealot and Netflix, places where Apple Pay are useless.
 

Louis72

Expert Member
Joined
Jun 15, 2010
Messages
1,077
So the error message I get at Woolworths is "insufficient OTB" on the cashier screen not on the payment device. IMG_7761.jpg
 
Last edited:

mccdyl001

Member
Joined
Nov 8, 2005
Messages
21
Lol The real reason is the cut of interchange Apple demands. Its a gamble with FNB, SBSA and Capitec hoping that they won't lose too many clients and Nedbank, Discovery and ABSA hoping they gain more client spend revenue than the cut of interchange paid to the big fruit. FNB is vulnerable given their brand positioning as the smart, technology first bank, Capitec clients probably don't give a hoot in general and SBSA is in the middle. The real heat comes from the high end clients at SBSA and FNB who have no issue dropping 30k for a iFruit phone and can't use a key feature....until they jump ship to another bank.
I know a relatively high net worth individual who was on FNB private wealth who’s jumped ship (and yeah, he’s always on that current year’s R30k “fruit phone”). He compared the hassle of all the ebucks hoops you have to jump through each month to try keep a good level vs the simplicity of being able to pay for stuff with his watch or phone when out and about and said enough is enough. I doubt he’ll ever be back either, cause once you’ve gone through the schlep of changing banks; you’re not going to reverse it in a hurry.
 

CranialBlaze

Expert Member
Joined
Jan 24, 2008
Messages
3,320
So the error message I get at Woolworths is "insufficient OTB" on the cashier screen not on the payment device.

In my world that Over The Bars, and there is definitely not any form of insufficiencies in that. Zero is the perfect quantity.

Wonder what that means in banking, maybe Open to Buy, that’s the most logical meaning of it I can find on Google. That would suggest the “virtual” card linked to your Apple Pay does not have a high enough limit to cover the transaction.

I pod there yesterday but that was literally a R9 bottle of water.
 

Dave

Honorary Master
Joined
Aug 31, 2008
Messages
54,370
In my world that Over The Bars, and there is definitely not any form of insufficiencies in that. Zero is the perfect quantity.

Wonder what that means in banking, maybe Open to Buy, that’s the most logical meaning of it I can find on Google. That would suggest the “virtual” card linked to your Apple Pay does not have a high enough limit to cover the transaction.

I pod there yesterday but that was literally a R9 bottle of water.

Google seems to be indicate “off trial balance” as a financial definition.

 

Tim_vb

Senior Member
Joined
Nov 7, 2008
Messages
537
That one made less contextual sense. Trial balance comes in after the ledger entries, that’s like an annual thing if I remember my accounting, would not be related to a pending transaction.
"Open To Buy" is the limit used to check before a card transaction is authorized
 

$m@Rt@$$

Expert Member
Joined
Jul 6, 2009
Messages
1,952
"Open To Buy" is the limit used to check before a card transaction is authorized
That sounds plausible. Because if I understand it correctly Apple Pay doesn't transmit your actual card information.
 

johnjm

Expert Member
Joined
Jul 26, 2005
Messages
2,430
I know a relatively high net worth individual who was on FNB private wealth who’s jumped ship (and yeah, he’s always on that current year’s R30k “fruit phone”). He compared the hassle of all the ebucks hoops you have to jump through each month to try keep a good level vs the simplicity of being able to pay for stuff with his watch or phone when out and about and said enough is enough. I doubt he’ll ever be back either, cause once you’ve gone through the schlep of changing banks; you’re not going to reverse it in a hurry.

International payments and specific stock are platforms is why I won’t completely move to discovery, I’m just using it to milk the miles and vitality now. I realised I can triple my life benefit that is payable by doing exercise which is what I did anyway.

By the way, discovery have plenty hoops too, and tailored to you. I’m still waiting for them to answer me a specific query that required 20k in a shitty vitality savings account for my diamond status, while I couldn’t find any terms and conditions. Call centre didn’t understand that requirement either.
 
Top