Xiv) Payment Revolution

(phones or other gadgets can be used to pay for goods and services, replacing cash or cards), eg Apple Pay - the banks have reportedly agreed to pay Apple a 15 to 25 basis points discount on their card fees, ie 1/10th of the total. This will hurt the banks unless the number of transactions increases with Apple's involvement. Remember: the US debit and credit card purchases were worth over $US 4.1 t. (2013); Apple has 800 m. Active iTune users; has sold ½ b iPhones. Also, Google's Android operating system powers 1 b devices. Mobile payments are just 7% of total installed transactions in the USA (2014) and banks have been unable to build a suitable technological platform. Apple has the technical expertise, brand recognition, is free of the banking regulatory system and has the devices to handle mobile payment, ie with a system that protects personal data and is expected to make mobile transactions safer than cards
(source: The Lex Column, 2014d)


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