24 June 2018
Register for the webinar today

Chinese banks charged half the fees levied by Apple Pay on US banks

23 February 2016  |  11490 views  |  0 Apple Pay

Chinese banks are to pay half the fees levied by Apple on US banks for the privilege of leveraging Apple Pay, as the consumer electronic giant bids to build market share in the country's competitive mobile payments market.

The deal with Chinese banks will see Apple get around 0.07% per transaction, according to a report on Chinese site Caixin, compared to the approximately 0.15 percent it’s charging banks for credit card purchases in the US.

The fees levied by Apple on merchant interchange revenue have been a stumbling block for the company as it bids to enter new markets. Efforts to enter the Canadian and Australian markets have stalled, as bank resist the company's revenue sharing demands.

Similar arguments delayed its entry to China, according to Caixan, with the company eventually relenting in a compromise agreement forged with the initial 19 launch banks, who will also see a two-year moratorium on payouts to Apple.

States the journal: "Apple started negotiating with major Chinese banks and UnionPay over profit-sharing and technical issues in 2014. The talks stalled, apparently because Chinese banks argued the charges were too steep."

As it bids to take on local tech giants Alibaba and Tencent, Apple Pay has got off to a roaring start, signing up 40 million users on day one.

According to estimates from analysts at Crone Consulting, Apple Pay scored the firm $15 million in revenue in its first year in the US, with the figure projected to top $1 billion annually in five years if ad revenue is factored in.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Apple Pay ready to play in China; LG Pay launch rolled back

Apple Pay ready to play in China; LG Pay launch rolled back

16 February 2016  |  6921 views  |  0 comments | 9 tweets | 10 linkedin
ANZ launches mobile payments service for Android smartphones

ANZ launches mobile payments service for Android smartphones

10 February 2016  |  14485 views  |  0 comments | 9 tweets | 8 linkedin
Australian bank boycott of Apple Pay continues as NAB rolls out Android rival

Australian bank boycott of Apple Pay continues as NAB rolls out Android rival

25 January 2016  |  10695 views  |  3 comments | 13 tweets | 15 linkedin
UK banks drag their feet as Apple Pay opens for business

UK banks drag their feet as Apple Pay opens for business

14 July 2015  |  15313 views  |  11 comments | 26 tweets | 24 linkedin
Apple Pay claims to cover 90% of US credit card market

Apple Pay claims to cover 90% of US credit card market

17 December 2014  |  13246 views  |  1 comments | 23 tweets | 18 linkedin
US banks pay high price for cosying up to Apple

US banks pay high price for cosying up to Apple

05 November 2014  |  17358 views  |  8 comments | 25 tweets | 26 linkedin

Related blogs

Create a blog about this story (membership required)
Visit https://secure.vasco.comVisit equensworldline.comVisit http://go.jumio.com/finextraAd

Top topics

Most viewed Most shared
GPS raises £44 million to fund international growthGPS raises £44 million to fund intern...
26649 views comments | 7 tweets | 8 linkedin
Robots save Nordea from GDPR processing nightmareRobots save Nordea from GDPR processing ni...
9399 views comments | 10 tweets | 18 linkedin
BIS: Cryptocurrencies are an environmental disaster that could break the InternetBIS: Cryptocurrencies are an environmental...
8858 views comments | 18 tweets | 23 linkedin
ING and BNP Paribas invest in blockchain-powered trade platform TradeIXING and BNP Paribas invest in blockchain-p...
7383 views comments | 15 tweets | 27 linkedin

Featured job

to $120K base, 200K ote, benefits
New York City, NY - USA

Find your next job