Banks and Credit Unions to Team Up Against Apple Pay Fees

Original Article ↗ Hacker News Discussion ↗

Banks and credit unions are challenging Apple over the fees it charges for Apple Pay transactions, arguing the company’s control of the iPhone’s NFC hardware gives it an unfair payments monopoly. Commenters weigh whether Apple is providing enough value and fraud reduction to justify a per-transaction cut, especially when Google Wallet doesn’t charge issuers and many countries have low-cost public or bank-run payment rails like Brazil’s Pix or Europe’s SEPA. The broader debate centers on payment systems as critical infrastructure, the trade-off between convenience, privacy, and fees, and whether governments should step in to curb what some see as rent-seeking by both tech firms and card networks.

Apple Pay Fees and Bank Backlash

  • Many commenters think banks and credit unions mainly want to capture Apple’s 0.15% fee, not improve user experience.
  • Some argue Apple is entitled to charge for infrastructure it built and popularized; others say users already “paid” via iPhone prices and that the fee is pure rent-seeking.
  • Several note that Google Wallet reportedly does not charge issuers for NFC payments, fueling claims that Apple’s margins are excessive.

Impact on Consumers and Merchants

  • Widespread view that any added cost to banks is ultimately passed on to consumers through higher prices or fees.
  • Others argue there is a limit to what people tolerate and that cash handling can be more expensive than card payments anyway.
  • Walmart’s shift to contactless is cited as evidence that insisting on chip-only slowed checkout and confused customers used to tap-to-pay.

Competition, Regulation, and Public Infrastructure

  • Strong support from some for treating payments as a public utility (e.g., Pix in Brazil, SEPA Instant, FedNow) to avoid private “rents.”
  • Counter-argument: 1–3% is seen by some as a reasonable market price for fraud management and global connectivity; government rate-setting might raise costs or stifle innovation.
  • Others note that capped interchange (EU/UK/Australia) shows fees can be much lower, and that credit card “bundled perks” distort true payment costs.

Wallet Fragmentation and User Experience

  • Many refuse to use bank-specific wallets and want a single universal wallet.
  • Concern that opening iOS NFC could lead to a messy ecosystem of multiple, inferior wallet apps, even if technically it improves competition.

Privacy and Security Disputes

  • Some emphasize Apple Pay’s tokenization and on-device processing as more secure and private than plastic cards, especially against compromised terminals.
  • Others push back, noting Apple devices show transaction histories and question how Apple can display them without knowing transaction details.
  • A technical subthread claims retail tap transactions bypass Apple servers, with transaction data retrieved later from issuers; there is disagreement and some confusion about exact data flows.

Alternatives and Protocol Ideas

  • Pix, Zelle, domestic instant-payment schemes, and open protocols are held up as models for direct bank-to-bank transfers without card networks.
  • Skepticism remains about banks’ willingness to implement truly open, user-facing protocols that would undercut Visa/Mastercard economics.