NEW YORK – Credit card companies and banks seem to absolutely love Apple's new mobile payment technology, Apple Pay, says the Motley Fool in a recent article, showing their approval with Apple Pay promotions and advertisements. So, why are lenders so supportive of Apple Pay?

First and foremost, writes Motley Fool, Apple Pay is not trying to work around the existing credit card system, allowing credit card companies to keep their lucrative merchant fees. This is in contrast to the Merchant Customer Exchange group's CurrentC, which emphasizes store credit and direct withdrawals from customer checking accounts — two methods that avoid merchant credit card fees. “Apple contends that it's the wallet that needed disruption, not the credit card system,” says the news source.

Second, while Apple will collect undisclosed fees for Apple Pay transactions that are independently negotiated with banks and credit card companies, lenders might make up for the fees with fewer fraud cases and higher spending. Apple Pay adds a layer of security to traditional credit card payments by using tokenization, which keeps credit card numbers secure, and by verifying identity with Touch ID. The mobile payment technology also gives lenders a formidable inroad into the fast-growing mobile channel.

And while banks and car companies may be jumping on-board, convincing merchants to use Apple Pay won't be easy, since Apple Pay has done nothing to help merchants reduce the fees they pay for credit card transactions.  That said, early signs of success for Apple Pay and a subsequent boost for other near-field communications-based mobile payment services suggest the technology is here to stay.

Keep an eye out for next month’s issue of NACS Magazine, featuring a cover article on the new payment system.