posted at 20:50
Author Name: Rob Lever, with Sophie Estienne in New York
Apple Pay fails to unify fragmented market
Washington - Apple Pay, meant to inject momentum into a fragmented market for the emerging mobile payments sector, has instead highlighted the squabbles between retailers and the banking and payments industry. Since Apple Pay made its debut October 20 for US customers with the iPhone 6, several major retailers have said they would not use it. "You're never going to come up with anything as smooth as easy as Apple Pay. But if you can't use it, you're going to use something else," said Avivah Litan, an analyst at Gartner who follows mobile payments. Apple Pay has aligned itself with major banks and payment processors Visa and MasterCard, which take a cut of every transaction, typically two to three percent. Retailers, which often operate on razor-thin profit margins, would like to cut or eliminate those fees, and Apple Pay does nothing to change that system. Nitesh Patel, analyst with Strategy Analytics, said retailers are not necessarily targeting Apple but want "To avoid what they believe are excessive swipe fees and the cost of upgrading hardware and software to accept contactless payments." "Apple Pay is highly secure, and the data privacy will mean that merchants are less likely to be hacked since they won't have card payment data that hackers are interested in," she said. "Apple Pay provides an example of the promise and the challenges of mobile payments in a very clear way."

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