The biggest banks and credit card companies in the United States are supporting Apple Inc.’s new payment service despite previous comments from their officials that it would pose a threat to their business.
Senior executives of Citigroup, Bank of America, Wells Fargo, Capital One, JPMorgan Chase and Barclays as well as credit card companies MasterCard, Visa and American Express were in Silicon Valley during the unveiling of the technology giant’s payment service on Tuesday, the Financial Times reported. The companies represent 83 percent of total US payment volume.
Apple is taking aim at the credit card’s five-decades-old magnetic strip, promising to overhaul an “antiquated” US payments system by letting customers pay for transactions with their iPhones, the report said.
“Payments is a huge business,” chief executive Tim Cook was quoted as saying. “We’ve created an entirely new payment process.”
In February, JPMorgan Chase CEO Jamie Dimon said the payment service being introduced by technology firms was a threat to the banks’ business.
“[They] all want to eat our lunch,” Jamie Dimon had said. “I mean every single one of them, and they’re going to try.”
But during Apple’s product launch, Dimon was singing a different tune. “Everyone wins,” he said of the service.
Banks participating in Apple’s new payment service admitted that they have to give up some of their fees for processing transactions to Apple, the report said.
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