09-10-2014, 07:43 AM
The card associations (Visa, MasterCard) are owned by the banks, and serve to license the trademarks, handle the transactions (authorization, processing, settlement), and administer the rules of the programs (merchant fees, merchant rules, security, etc.). I'm not sure how much, but at least some of the actual transaction processing is done by smaller companies under contract.
The member banks pay fees to take part in these programs, and issue the branded cards.
Like any other member, Apple will have to pay the association dues to participate in these programs, and fees for the transactions that are processed through their systems. Given their size, potential volume, and clout, they were probably able to negotiate a deal as good, if not better than most other banks, but there are still transcation fees involved.
It costs money to establish and operate these networks, and given a choice, few people, and companies will work for free. Visa and MC are no different. They owe it to their shareholders not to.
AMEX entered the business a little differently. They started by issuing charge (not credit cards), but now are mostly similar to the other two.
The member banks pay fees to take part in these programs, and issue the branded cards.
Like any other member, Apple will have to pay the association dues to participate in these programs, and fees for the transactions that are processed through their systems. Given their size, potential volume, and clout, they were probably able to negotiate a deal as good, if not better than most other banks, but there are still transcation fees involved.
It costs money to establish and operate these networks, and given a choice, few people, and companies will work for free. Visa and MC are no different. They owe it to their shareholders not to.
AMEX entered the business a little differently. They started by issuing charge (not credit cards), but now are mostly similar to the other two.