Apple drops Discover, adds Visa as virtual debit card partner

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As Apple prepares to build contactless payment acceptance via iPhones, the company moved to Visa from Discover as a card network supporting its Apple Cash virtual debit card.

This week, Apple placed Visa as the sole card network on its virtual Apple Card debit card, ending a five-year run with Discover Financial Services, which worked with Green Dot Bank to launch the card in 2017.

The move comes about two months after Apple announced plans to turn the iPhone into a payment-accepting device by enabling Tap to Pay technology on Apple devices.

“While Discover is no longer the payment network for Apple Cash, we remain committed to the many initiatives and programs we are working on with Apple to deliver value to our joint customers,” a Discover spokesperson said in a statement. communicated.

While Discover Network has a global reach, Visa has a larger global merchant footprint.

David Paul Morris/Bloomberg

One observer suggests that the biggest card networks have been battling it out for primary positioning in the next phase of Apple Pay. “Apple’s move to Visa from Discover foreshadows larger moves to come from Apple’s contactless payments initiative,” said Richard Crone, principal of Crone Consulting LLC.

While Discover Network has a global reach, Visa has a larger global footprint, including exclusive card acceptance with select stores like Costco.

“This is a significant win for Visa and a loss for Discover and its PIN Pulse debit network, which could have benefited from being the rails of Apple Cash as the Apple Pay ecosystem matures. develops,” Crone said.

Until now, the Apple Cash card in the wallets of Apple Pay users did not carry any card network logo. But as users update their iPhone or iPad settings, the virtual debit card now sports a Visa logo.

There are no other changes to the functionality of Apple Cash, which allows users who link a debit card to add and store funds in the account, send and receive cash instantly. other Apple Cash users and pay at merchants with contactless payment acceptance through Apple devices.

Apple announced in February that Tap to Pay on iPhone will be available later this year with Stripe as its initial channel partner, allowing merchants to accept credit and debit payments through an app in their own iPhones, eliminating the need for a third-party card reader.

“As Apple expands its payment capabilities for merchants to accept payments on iPhone, many merchants could completely bypass the need for third-party hardware to accept payments, putting pressure on hardware makers like Ingenico and same Square,” Crone said.

Green Dot executives were unavailable to comment on the bank’s future role with Apple Cash. Visa and Apple did not respond to requests for comment in time.

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