Better Late Than Never: Discover Cards To Join Apple Pay This Fall

When it comes to Apple Inc.’s popular Apple Pay mobile-payment service, some players might figure it’s better to be late than never to participate at all.

Issuer Discover Financial Services says consumers will be able to use Discover credit and debit cards with Apple Pay beginning this fall. Apple Pay works on iPhone 6 and 6 Plus smart phones as well as with the new Apple Watch, which began shipping over the weekend. The service relies on near-field communication to link to merchant terminals.

Discover, which announced in September it would add Discover cards to Apple Pay, did not provide more specific timing or an explanation of the long gestation time. In September, Discover said it was in discussions with Apple. In an email to Digital Transactions News, Discover says it cannot be more specific about the timing. “We have just started the integration,” the spokeswoman says. “The agreement was just signed and we continue to work with Apple on the technical build and integration.” Discover would not disclose the number of credit and debit cards it issues.

The upcoming Apple Pay deal also provides a way for financial institutions that issue Discover debit cards to let their cardholders use Apple Pay, Discover says.

Discover marks the fourth major card brand to join Apple Pay. Visa Inc., MasterCard Inc., and American Express Co. supported Apple Pay at its launch in October.

Discover cards will use the same tokenization protocol used by other cards enrolled in Apple Pay, relying on a unique device account number instead of the actual card number to make payments at contactless point-of-sale terminals and with in-app purchases.

Apple’s agreement with card issuers calls for issuers to pay Apple a fee of 15 basis points (0.15%) per transaction for credit card transactions and half a penny on each debit card payment. It is not known if Discover, which like AmEx is both an issuer and a network, is subject to that same fee.