MasterCard and Visa do pay Apple a minuscule fee (15¢ per $100.00, and less in Europe), however, it is smaller than the amount they expect to save due to reduced fraud from folks using ApplePay (and Apple apparently has also agreed to split some fraction of any fraud losses with them).
In Europe, the interchange fee (what the retailer's bank pays to the card company) is limited to 0.3% for credit cards and 0.2% for debit cards. This came into effect sometime last year.
Reward programs always have been a bit less pronounced here in Europe and mostly have been reduced after the regulation of interchange fees.
Naw, never mind this is the USA. Free market is all that matters.
With regards to merchant fees, I have actually had some merchants say they would be glad to take a check
As for Apple Pay, it becomes A LOT more compelling if you have an Apple Watch. All of a sudden instead of having to pull your phone out of your pocket you Press the button on the watch, move your wrist in front of the reader, and it's done.
To be fair since I've gotten my watch Apple Pay is in WAY more places so I can use it on a regular basis.
I think Apple Pay would still win over the card for privacy (I'm REALLY tired of getting cards stolen) and speed over the current chip system.
Apple takes a cut for "tap to pay". No one wants to pay extra middlemen.
> For reasons I don't understand, the credit card makers have spent many years bringing the new chip cards to market, they include much higher technology than ever offered before, yet the payment process takes much longer.
It took years to roll out chip and pin because no one wanted to pay for the new terminals (another expensive cost pushed on to someone). It takes longer to approve a transaction because of the challenge response implemented to reduce fraud.
> I do understand the fees though. The credit card brands and banks have worked themselves, through years of diligent effort, into a business where they can impose a kind of "tax" of 3% on most of the retail economy across the entire US.
This is being driven down by legislation.
Everything has a cost, and someone has to pay it.