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# 248437 26-Mar-2019 15:31
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The Apple TV+ thread has been discussing low Paywave uptake and how it effects offering such as Apple Card+ in New Zealand. 


Thought it was best discussed here...

My views (except when I am looking out their windows) are not those of my employer.

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  # 2206940 29-Mar-2019 12:01
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Screw Visa and their 3% tax so I use good old Eftpos whenever possible.  Apple pay is even worse - 5%.



Everything you just said is total hogswash. Apple Pay, Android Pay, Samsung Pay and Garmin Pay have no higher interchange fee than any other credit card transaction, and as they are contactless are actually cheaper than a swipe or insert.


The talk in the media that contactless is an "extra 2% tax" is crap. Contactless transactions are actually cheaper to the merchant provided they're on Interchange Plus pricing, at 0.50% for Contactless Credit Mastercard (vs 1.40% to 2.05% for swiped or inserted Consumer Credit Mastercards); $0.004 (yes, 0.4 cents) for Contactless Debit Mastercard under $15, and between $0.06 and 0.40% for higher Contactless Debit Mastercard transactions; from 0.85% to 1.57% for Contactless Visa Credit (vs 1.25% to 1.97% for swiped or inserted - basically Contactless is a 0.40% discount); and 0.30% for all Visa Debit transactions including Contactless (makes sense now why all the banks switched to Mastercard debit huh...).


What the merchant pays their bank will usually include either a % increase over these rates (interchange plus) or will be the same for all types of transactions (blended).


Banks used to push blended because the idea for the merchant is they'd pay 1.5% for all transactions even though the highest rate is 2.20% (Commercial Credit Mastercard - I've deliberately excluded the international cards as they are charged differently). Of course, most people didn't have platinum cards back then so for your average dairy they lost out big time on that, and when debit cards started replacing EFTPOS they got screwed on it if people selected credit or - I dunno - tapped it.


The problem is that people want contactless - it's convenient and it's fast (same can't be said for inserted EFTPOS...) - but there is no contactless EFTPOS application, so when a card is tapped the only networks that can switch the transaction is either VisaNet, Mastercard, Diners Club (The Warehouse, also switch Discover), American Express (also switch JCB) or UnionPay. To solve this, two things need to happen. First, EFTPOS needs to develop a contactless application that can be installed on cards. Second, banks and acquirers need to enable Least Cost Routing to enable merchant terminals to switch the transaction on the network with the lowest cost of acceptance. Basically that means the terminal will authorise the transaction with the card, see that it has the EFTPOS application installed and send the transaction automatically over the cheaper EFTPOS network.


The reason that won't work is that unlike in Australia where every eftpos transaction switched by EPAL (eftpos Payments Australia Limited) incurs a $0.15 fee, transactions switched by Paymark incur no fees (which is why merchants like EFTPOS). As a result, Paymark operates off much lower budgets than EPAL, and cannot afford to invest in technologies like contactless (I've asked them - they've basically said "yeah nah not happening, but look how great online EFTPOS is?!?")




Banks are disgusting....they take a 2% cut from merchants who work hard and risk so much. Banks assume no risk. 



False. Liability shift occurs on more transactions than you think. Online for example, if the merchant attempts 3DSecure (Verified By Visa or Mastercard Securecode) then if the cardholder disputes the transaction because they claim it wasn't them the issuer eats the cost (not the merchant). For transactions in store or at an ATM, the liability falls on the issuer (not merchant) as well, unless the issuer supports EMV and the merchant does not (impossible now, as non-EMV terminals were decertified by Paymark and disconnected from the network about a decade ago).

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