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Use of biometrics gets lower transaction fees for Apple Pay merchants


Apple announced that it is allowing Apple Pay merchants to pay card present rates (aka cardholder present) for all transactions consumers make in store using their mobile phones, which will save them as much as 1.25 percent on each transaction, according to a report by PYMNTS.com.

Apple Pay’s cardholder present rates of 1.5 percent is considerably less than card not present rates, which can command 2.75 percent or more per transaction.

The lower transaction fee can be attributed to Apple’s decision to provide NFC and tokenization, combined with biometrics.

The combination of the three features provides greater assurance to credit card companies and merchants that the card credentials presented by the individual at a point of sale terminal actually belong to that same individual.

Apple will also honor the same rate for all transactions performed via the Apple Smartwatch once it is released in 2015.

Reports have also surfaced that suggest that Visa and MasterCard are also thinking of extending these lower rates to other mobile wallet providers if their services also incorporate biometrics.

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