As a consumer interested in obtaining goods or services, it is important to understand what the provider is prepared to accept in exchange. It is a safe bet that (with the odd exception) cash will be one of your available options. Other than cash, though, how can you find out which of the myriad methods of payment will be accepted without question?
Well, you could talk to someone, of course. But this isn’t always possible, for instance due to language barriers. Neither is it always practical to wait until you have filled your shopping basket only to find that you have no accepted method of payment.
The solution, of course, is to display a recognised standard symbol, indicating to the consumer that they may use MasterCard, Visa, Amex, Discover, PayPal, bitcoin, or whatever other payment methods are on display. The additional display of the EMVCo contactless symbol indicates that contactless payments should be possible with the payment card brands displayed alongside.
I say ‘should be possible’ because, unfortunately, this is not always the case. For legacy reasons that we won’t go into here, it is not uncommon to find retailers who accept Amex payments, and contactless payments, but not Amex contactless payments. Still – whilst not as convenient, the payment can still be completed via Chip & PIN.
But now adding to the mix we have a brand new acceptance mark for Apple Pay. On the face of it, this seems a sensible decision. After all, if you want to use Apple Pay then it’s good to know where you can use it. But then again, you already do know where you can use it – everywhere that displays the EMVCo contactless symbol. Apple Pay, after all, is not a payment scheme in its own right, but rather uses the existing card schemes’ contactless card payment infrastructure to perform NFC transactions.
What the Apple Pay decal does not tell me is whether or not the payment card loaded into Passbook is accepted at this retailer; for that I still look for that card scheme’s mark. It also doesn’t tell me if that retailer who does accept my card scheme is able to perform that particular contactless transaction. For instance, those retailers who accept Amex, but can’t yet perform Amex contactless transactions, will not be able to accept Amex Apple Pay transactions either, as the BBC’s Rory Cellan-Jones discovered on the morning of the UK launch when he was out and about in London. (Indeed, Apple Pay featured on the main evening news in the UK, as shown here!)
But more importantly for an aspiring acceptance mark, a retailer advertising their acceptance of Apple Pay may not actually accept the cards loaded into it at all. Amex and Discover/Diners do not enjoy the same level of acceptance as MasterCard or Visa, but their cards are (or will be) available to be loaded into Apple Pay. Should a consumer not expect that a retailer who advertises their acceptance of Apple Pay will actually accept Apple Pay, regardless of what they have loaded into it?
Incidentally, whilst the focus is currently on what “Apple Pay acceptance” actually means, there are similar potential implications for ‘four party payment card schemes’ (i.e. MasterCard and Visa) as a result of the recent EU Regulation 2015/751 on interchange fees. As well as the headline-grabbing cap on the fees themselves, Article 10 of this regulation is concerned with the schemes’ “Honour All Cards” rules, which currently require merchants to accept any card from the accepted scheme. This Article provides that:
Payment card schemes and payment service providers shall not apply any rule that obliges payees accepting a card-based payment instrument issued by one issuer also to accept other card-based payment instruments issued within the framework of the same payment card scheme.
In other words, payees (merchants) can choose which MasterCard or Visa cards they want to accept. Merchants may, for instance, choose to accept only debit cards and not credit. Or they may choose to accept everything except higher-fee rewards cards. “Honour All Cards” will instead become “Honour All Issuers,” meaning that merchants cannot refuse to accept a card based only on the issuer of that card.
To achieve this, the cards will need to be both electronically and visibly identifiable, as long as the card is issued within the EU. In deference to the second law of thermodynamics, merchants will be required to advertise which cards they do not accept, alongside the acceptance information. It is not yet clear how a non EU-issued card would be treated by a merchant who is depending on being able to identify a card product; the expectation of a non-EU cardholder will be that they can use their card at a merchant displaying the appropriate symbol.
So, when is an acceptance mark not a mark of acceptance? Well, when it cannot be relied upon to signify that the indicated payment method will actually be acceptable.