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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.

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FOCUS: Russia-Ukraine War

The Russian Orthodox Church Has A Kremlin Spy Network — And Now It's Spreading Abroad

The Russian Orthodox Church has long supported Russia’s ongoing war effort in Ukraine. Now, clergy members in other countries are suspected of collaborating with and recruiting for Russian security forces.

Photo of Russian soldiers during mass at an Orthodox church in Moscow.

Russian soldiers during mass at an Orthodox church in Moscow.

Wiktoria Bielaszyn

WARSAW — Several countries have accused members of the Russian Orthodox clergy of collaborating with Russian security services, pushing Kremlin policy inside the church and even recruiting spies from within.

On Sept. 21, Bulgaria deported Russian Archimandrite Vassian, guardian of the Orthodox parish in Sofia, along with two Belarusian priests. In a press release, the Bulgarian national security agency says that clergy were deported because they posed a threat to national security. "The measures were taken due to their actions against the security and interests of the Republic of Bulgaria," Bulgarian authorities wrote in a statement, according to Radio Svoboda.

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These reports were also confirmed by Russia's ambassador to Bulgaria, Eleonora Mitrofanova, who told Russian state news agency TASS that the priests must leave Bulgaria within 24 hours. “After being declared persona non grata, Wassian and the other two clerics were taken home under police supervision to pack up their belongings. Then they will be taken to the border with Serbia" she said.

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