Think You’re So Tough, Apple? Meet Bankers In China

Payments professionals who have lost battle after battle fighting with Apple Pay’s people on getting reasonable fees know that Apple sees its lock on iPhones and iPads as a reason to not bother having to negotiate on rates. You want in? Pay up.

Well, you can take some solace in Apple getting a taste of its own apple-flavored medicine. Feeling a strong strategic need to get into the government-managed Chinese market, Apple found itself on the weaker end of negotiations with bankers. With government backing, there was little fear of being undercut by a rival bank.

The result? This report from Caixin Online: “Apple will earn fees from Chinese banks when customers use its mobile payment service for purchases, but they will be about half of what the U.S. tech giant charges in the United States.”

Apple Pay will be accepted in China starting Feb. 18.

It’s an impressive inside look at those Apple talks. “Chinese banks have agreed to pay around 0.07 percent of each transaction to Apple, the sources said. Apple Pay reportedly collects 0.15 percent of each purchase from banks in the United States,” the story said. “A deal was reached in December as Apple announced 15 Chinese banks, including the nation’s biggest lender, Industrial and Commercial Bank of China, agreed to let customers link their bankcards to Apple Pay. Four more banks joined the partnership later. Apple will start collecting the fees in two years.”

The deal is hardly surprising, but it does create some tension between UnionPay—which is working with Apple—and Alibaba and Tencent, which do not yet. Complicating the matter further is that barely 60 percent of Chinese POS units support NFC.

Still, it’s pleasant to see somebody getting Apple to discount.

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