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Comment by ericmay | Hacker News Reader

Why shouldn’t Apple be able to make money for the service they created?

The phone holds on to a credit card number and some extra information. What service is happening here? Is Apple doing something meaningful every payment?

The phone doesn't store your card number. Apple brokers a token at setup, secures it on-device, and manages it afterward (suspend, re-issue).

So it doesn't generate a second card number like other things I've used?

But anyway it sounds like the answer to my question is no, Apple is not doing anything meaningful per payment. They play a role in setting up a card and that's it. Is that accurate?

When you add a card, your bank creates a device-specific Device Account Number, encrypts it, and sends it to Apple w/ a key used to generate a unique sec code for each transaction.

And is that information stored on the phone? Do Apple's servers need to be running for me to make a purchase?

Not if you're tapping in a store. Apple's servers re-encrypt the payment data for specific merchants if you buy in an app or on a website. Apple brokers requests for adding a card, or suspending one via Find My, or setting one up again whenever a person changes phones.

A service for whom? It has already been paid for by the users when they bought the iPhone.

Users aren’t paying the fee though

Of course they are, passed on as increased prices for everyone, which is exactly the problem. Sure the banks here would like these fees gone, but it also hurts society in general.

That’s true of any cost that any company pays for any service.

And customer are also paying cash handling fees, which in the U.K. at higher than card handling fees.

Companies that prefer or only take cash tend to do it for tax evasion rather than cost purposes.

U.K. fees tend to be about 1-1.5% all in, for cash or card (excluding cost of employee taking cash to bank). Things like pix, net, grocers about 0.5-1%. Nets QR is cheaper than Nets rfid.

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