Somehow I always thought it was just a matter of using the phone’s NFC chip to mimic the credit card, but a shop owner told me they actually take a cut. Is it bullshit or have I been naïve?
yes they take a cut.
Kinda
In a normal transaction without a phone you use a plastic card issued by MasterCard/Visa/Amex (or a local processor). The processing company charges a merchant a small percentage fee on that transaction to the business. In some places they might add that processing fee to the bill, but that’s illegal in my country nowadays.
When you add Google/Apple into the mix, they’re importantly not replacing anyone, they’re just adding themselves in to basically just replace the “plastic” part with “virtual” in what I said before. So the payment processor still takes the same fees they always have, it’s just a phone talking to the card reader rather than a chip in a card.
So how do they make money? I believe Apple just charges the bank a small percentage, which I imagine they reconcile out of the payment processor fees. Google, on the other hand, I think offers it to banks for free, because as is tradition, they’re more interested in the data.
They do take a cut. But they take a cut from the credit card company, not from the shop owner and not from you. The cut the shop owner has to pay is the same as with a „normal“ credit card payment.
So the fee is now shared between the credit card company and Apple/google (I don’t know how much, but I doubt it is 50:50)
They’re processed through the same payment networks, it’s just a different method of creating single-transaction authorizations similar to tap-to-pay with a card’s EMV chip.
If anything, from what I’ve read the phone payment methods lead to fewer chargebacks by virtue of doing biometrics before transactions.
Maybe they take a fut from they and not you. Like credit card fees.
