Apple Pay Must Tweak Its Model To Work In Europe

You can also use the Apple Watch to pay
You can also use the Apple Watch to pay
Ninon Renaud

PARIS — After changing the way we listen to music with the iPod and kickstarting the smartphone era with the iPhone, is Apple Pay going to revolutionize how we pay? The least we can say is that the Cupertino giant has done everything to maximize its chances of succeeding in its objective: to relegate wallets to museum pieces.

The strength of Apple Pay lies in the way the company integrates it in the payment ecosystem. Instead of confronting the banks on their own terrain, as others have done, Tim Cook and his group chose to become their allies. It’s a win-win situation for Apple, as it can promise its clients not to use their banking data while pledging to help banks fight against fraud, which represents an estimated 0.145% of the sums paid in card transactions.

Apple’s authentication system, which uses the iPhone 6’s Touch ID fingerprint sensor, coupled with an encryption process of all data linked with the bank cards, indeed reinforces the security of Apple Pay.

In exchange, the company will take a share of the commissions cashed in by the banks. That amount is estimated at around 0.2% per transaction made via Apple Pay, which leaves U.S. banks with 0.3% to 0.8%, depending on the payment mode (debit or credit card).

But before Apple can export its new service across the Atlantic, it will need to adapt its model to fit the European system. "Apple’s prism seems entirely American. Whether it’s because of its commercial or security approach, this economic model cannot be implemented that easily in Europe," warns Gilbert Arira, CEO of the Groupement des Cartes Bancaires CB.

On the Old Continent, interchange fees are indeed significantly lower, especially in France where they only represent 0.28% of a transaction. This proportion makes it difficult for a new player to get a worthwhile share. Not to mention the fact that many banks have already invested a lot of money in e-wallets, with which Apple Pay would be competing.

Fraud is also less frequent in Europe, as the chip-and-PIN cards are a lot more secure than the magnetic strip cards used in the U.S. In France, fraud represents 0.045% of the sums paid by cards, some 30% less than in the U.S.

So what economic equation will Apple offer to European banks? However complex it might be, "Apple is a norm-maker," admits a banker. In other words, it would be best to work hand-in-hand with the tech retail company than against it.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!

What It Means When The Jews Of Germany No Longer Feel Safe

A neo-Nazi has been buried in the former grave of a Jewish musicologist Max Friedlaender – not an oversight, but a deliberate provocation. This is just one more example of antisemitism on the rise in Germany, and society's inability to respond.

At a protest against antisemitism in Berlin

Eva Marie Kogel


BERLIN — If you want to check the state of your society, there's a simple test: as the U.S. High Commissioner for Germany, John Jay McCloy, said in 1949, the touchstone for a democracy is the well-being of Jews. This litmus test is still relevant today. And it seems Germany would not pass.

Incidents are piling up. Most recently, groups of neo-Nazis from across the country traveled to a church near Berlin for the funeral of a well-known far-right figure. He was buried in the former grave of Jewish musicologist Max Friedlaender, a gravesite chosen deliberately by the right-wing extremists.

The incident at the cemetery

They intentionally chose a Jewish grave as an act of provocation, trying to gain maximum publicity for this act of desecration. And the cemetery authorities at the graveyard in Stahnsdorf fell for it. The church issued an immediate apology, calling it a "terrible mistake" and saying they "must immediately see whether and what we can undo."

There are so many incidents that get little to no media attention.

It's unfathomable that this burial was allowed to take place at all, but now the cemetery authorities need to make a decision quickly about how to put things right. Otherwise, the grave may well become a pilgrimage site for Holocaust deniers and antisemites.

The incident has garnered attention in the international press and it will live long in the memory. Like the case of singer-songwriter Gil Ofarim, who recently claimed he was subjected to antisemitic abuse at a hotel in Leipzig. Details of the crime are still being investigated. But there are so many other incidents that get little to no media attention.

Photo of the grave of Jewish musicologist Max Friedlaender

The grave of Jewish musicologist Max Friedlaender

Jens Kalaene/dpa/ZUMA

Crimes against Jews are rising

Across all parts of society, antisemitism is on the rise. Until a few years ago, Jewish life was seen as an accepted part of German society. Since the attack on the synagogue in Halle in 2019, the picture has changed: it was a bitter reminder that right-wing terror against Jewish people has a long, unbroken history in Germany.

Stories have abounded about the coronavirus crisis being a Jewish conspiracy; meanwhile, Muslim antisemitism is becoming louder and more forceful. The anti-Israel boycott movement BDS rears its head in every debate on antisemitism, just as left-wing or post-colonial thinking are part of every discussion.

Jewish life needs to be allowed to step out of the shadows.

Since 2015, the number of antisemitic crimes recorded has risen by about a third, to 2,350. But victims only report around 20% of cases. Some choose not to because they've had bad experiences with the police, others because they're afraid of the perpetrators, and still others because they just want to put it behind them. Victims clearly hold out little hope of useful reaction from the state – so crimes go unreported.

And the reality of Jewish life in Germany is a dark one. Sociologists say that Jewish children are living out their "identity under siege." What impact does it have on them when they can only go to nursery under police protection? Or when they hear Holocaust jokes at school?

Germany needs to take its antisemitism seriously

This shows that the country of commemorative services and "stumbling blocks" placed in sidewalks as a memorial to victims of the Nazis has lost its moral compass. To make it point true north again, antisemitism needs to be documented from the perspective of those affected, making it visible to the non-Jewish population. And Jewish life needs to be allowed to step out of the shadows.

That is the first thing. The second is that we need to talk about specifically German forms of antisemitism. For example, the fact that in no other EU country are Jewish people so often confronted about the Israeli government's policies (according to a survey, 41% of German Jews have experienced this, while the EU average is 28%). Projecting the old antisemitism onto the state of Israel offers people a more comfortable target for their arguments.

Our society needs to have more conversations about antisemitism. The test of German democracy, as McCloy called it, starts with taking these concerns seriously and talking about them. We need to have these conversations because it affects all of us. It's about saving our democracy. Before it's too late.

Keep up with the world. Break out of the bubble.
Sign up to our expressly international daily newsletter!