Israelis using Apple phones will be able to pay with their phones using the major tech company's Apple Pay, hopefully, by the end of this year, according to the Calcalist.
Apple Pay is estimated to launch in Israel by the end of the year, near the date on which Bank of Israel begins requiring large businesses to be able to receive payments in accordance with the EMV standard, which allows transactions between a customer and a business to be done using advanced forms of technological means such as Apple Pay.
Built into every smart phone is a chip called NFC which allows the cellphone to interact or "speak" with a a register, allowing for an alternative to typical payment methods such as credit cards or cash. While android phones allow for transactions to take place through any payment application, Apple phone users can only make a transaction using their cellphone by using Apple Pay. NFC chips in apple phones are encoded and blocked, allowing only for the tech company's app to make a transaction, which users must sign a contract first in order to use, according to the financial journal Calcalist.
The introduction of Apple Pay in Israel is part of a worldwide revolution expected to take place within the next year. Soon, Israeli businesses will be required to use the EMV standard in their payment services.
Owing to the fact that the revolution means that businesses will need to prepare in advance, three major Israeli credit card companies, Isracard, Max and Cal sent a letter to businesses in advance, the Calacalist found.
According to an outline which was presented in the letter, major businesses will be required to move to the EMV standard by the end of November 2020. Smaller businesses have been given until the end of July 2021 to make the transition, and Gas stations and businesses that sell primarily online have until the end of July 2022.
Governor of the Bank of Israel Professor Amir Yaron welcomed the revolution and urged to accelerate the introduction of EMV to Israel, under the assumption that it would lead to the introduction of new technologies in the world of transactions, improved service, and increased competition, the Calcalist reported.
According to the Calcalist, Apple Pay began talks with Israeli financial entities to formulate a payment cooperation through Apple devices in February. Yet, at the time, some of the entities involved were surprised to find out about Apple's high demands. The tech company reportedly required an estimated quarter of the credit card issuer's revenue from the transaction, just for the right to go through Apple Pay.
However, since then, negotiations have taken place and the commission has dropped by tens of percents from the initial asking price in Apple's demand.
Under the new agreement, credit card issuers such as banks and credit card companies will pay Apple an average of 0.05% of each transaction paid through its devices, a significant lower price compared to the initial commission which was estimated to be between 0.2 and 0.15%.