Apple, Amazon, and Ford Contend With Payment Models

Image Credit: iStock, fizkes

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In the world of e-commerce, processing payments is never as simple as A to B. Who facilitates what, which credit cards or services are accepted, and what fees get extracted are all quarreling complications that underlie each and every online purchase. They also lead to feuds, breakups, makeups, and new relationships.

This weekend was no shortage of drama. Apple contended with dating apps who say it’s taking obscene cuts of their business. Amazon ended a scuffle with Visa. And Ford found a new friend in Stripe.

Pay It Forward

Apple: Apple takes cuts as high as 30% from purchases made on its App Store but, last month got a little regulatory “encouragement” to rethink things. The Netherlands’ antitrust authority ruled blocking alternative in-app payment methods — notably in dating apps like Tinder — breached competition rules. Apple was ordered to comply by January 15 or face a fine.

Apple caved, sort of. On Saturday, the company said it will allow apps to use third-party payment options in the Netherlands, but will cut them out of its native payment option and slap security warnings on them in the App Store. There’s a reason Apple remains so defensive — it made $85 billion, or 22% of all revenues, off the App Store in fiscal 2021. There may be more regulatory “encouragement” coming, as Dutch authorities are probing the new changes.

Amazon: On Monday, Amazon backed off threats to ban Visa payments in the UK. Originally citing high transaction fees resulting from Brexit, the commerce giant said it’s working with Visa on a truce. British Visa holders could still face small surcharges similar to 0.5% fees in Australia and Singapore.

Ford: Ford is outsourcing its online payment processing. On Monday, the auto giant signed a five-year deal with Stripe to use its technology to process e-commerce payments in North America and Europe. Privately held Stripe, which has a $95 billion valuation, will lend its services to Ford just as the company’s market capitalization topped $100 billion for the first time and as it pursues a tech-savvy, electrified future.