Bill Gates, in last week’s Bloomberg interview:
“Apple Pay is a great example of how a cell phone that identifies its user in a pretty strong way lets you make a transaction that should be very, very inexpensive,” he said.
He explained: “So the fact that in any application I can buy something, that’s fantastic. The fact I don’t need a physical card anymore, I just do that transaction and you’re going to be quite sure about who it is on the other end, that is a real contribution.”
Some wonder just how inconvenient credit cards are. Is it really such an imposition to take a card from a pocket or a wallet to pay? Is Apple Pay solving a problem that isn’t too much of a problem?
Gates, though, said that Apple’s true role was in creating the market: “All the platforms, whether it’s Apple’s or Google’s or Microsoft, you’ll see this payment capability get built in. That’s built on industry standard protocols, NFC. And these companies have all participated in getting those going. Apple will help make sure it gets to critical mass for all the devices.”
The value of Apple Pay is much more than saving you a reach for your credit card. Far more important is Apple Pay’s role in battling fraud, keeping your credit card number out of the top level of the transaction.
how can the Bloogberg writer be so dumb? why do they insist on framing it as a questionable time-saver, rather than as a fraud-preventing measure that saves tons of money in the banking sector and protects consumers? are they that stupid, or is it willful?
banking system ultimately wants to get rid of paper money
and have every one borrowing money to pay for things.
This helps the banking system create money
and also track your purchases as well.
Banks don’t care about fraud as long as they make money of it.
No wonder banks are wetting themselves trying to praise ApplePay.
especially when your people laden with debt are not even buying houses in America.
How do banks make money off fraud? Hell, how do banks make money from tracking your purchases? Banks like stability and predictability, and anything that allows them to better manage risk in everything, not only granting of credit but the transactional use of, they’re going to be hot for.
“How do banks make money off fraud?”
This is how:
http://www.nytimes.com/2013/06/11/business/fraud-against-seniors-often-is-routed-through-banks.html
“how do banks make money from tracking your purchases?”
Same way everyone else does: by selling that data or access to it. This is why Apple points out they don’t track your purchases.
I should have phrased that as “how do banks make money from CREDIT CARD fraud?” The whole point of alternate payment methods like Apple Pay is that you’re NOT giving your account information over to strangers and you’re personally approving transfers with biometrics. If banks thought the Zions/First Delaware approach was viable they’d be fighting Apple Pay tooth and nail.
dr — sorry but thats insane. one of my biggest clients is a major banking brand, household name. they do not enjoy spending money on fraud. if they can minimize fraud research and payments, any money saved is money for their bottom line.
regardless, this has nothing to do w/ my question regarding bloomberg’s incompetence.
Credit cards are (generally) issued by banks, and checking debit cards can also be run as credit cards. The scam in this example was the banks ignored (and allegedly encouraged) fraudulent charges in order to collect fees from payer-initiated chargebacks. That is how banks can make money from credit card fraud. Apple Pay uses a device-specific number and dynamic CCV for each purchase, making repeated fraudulent use impossible. Presumably the banks that agreed to Apple Pay did so because they make more than enough money skimming transaction fees the old fashioned way.
Interesting to see Gates speak like this about Apple.