Apple Pay Cash Abroad
With the release of iOS 11.2 Apple has also launched its new Apple Pay Cash service to US customers. In an obvious play to go after the PayPal/Venmo market, iMessage users can now send money to each other directly as well as load their card and withdrawal funds to their US-based bank account.
Another feature that seems to have slipped under the radar is that Apple Pay Cash is also a virtual debit card. You can use it at Apple Pay terminals just like the rest of your credit and debit cards. If even appears like a normal card, but without a network logo (Visa/MasterCard etc.).
The United States only recently received chip-and-signature, while the rest of the world has moved on beyond even chip-and-pin to contactless tap cards. Since I travel a lot and Apple Pay is accepted at most contactless terminals in Europe, I wanted to see if this might be useful abroad as a way to dodge hefty debit card fees – or at least avoid the embarrassment of still having to have the waiter search for a pen so I can sign a receipt.
1. It turns out Apple Pay Cash is a Discover debit card.
After scrounging through the settings I discovered that Apple Pay Cash is just a normal Discover debit card (no pun intended), with a PIN code and everything. This can mean a lot of things: Discover credit cards usually have no foreign transaction fee, which would be fantastic. But being a debit card, I didn’t want to assume.
Luckily Apple has a great support line that will even call you at a scheduled
time. I imagine this will be very useful during the upcoming busy holiday season.
2. Apple Pay Cash card is managed by Green Dot Bank.
I contacted Apple Support, and was gleefully informed me I was somehow the first person that had ever asked about international transaction fees. Since he couldn’t answer directly, I was forwarded to a call center for their partner Green Dot Bank.
This sort of partnership is pretty normal for organizations like Apple. Companies don’t usually want to be in the position of managing their own financial institution, so instead they partner with bank that already handles the details. Green Dot Bank seems to be particularly well-suited since their only business model is issuing debit cards and prepaid credit cards. I spoke with Monique, who was also a bit confused, but managed to answer most of my questions.
3. Apple Pay Cash has a 3% flat fee for international transactions.
According to the Green Dot Bank representative, Apple Pay Cash has a 3% across the board fee for international transaction fees. This is the same as another US bank account I’ve been using for a few years, and not outside the norm for debit cards. One perk that I was promised is the bank does not tack on any extra flat dollar amount to the transactions, as some have been known to do.
4. Apple Pay Cash doesn’t disclose their exchange rates.
Like Discover card in general, I was told that there are no published exchange rates. This means you’re at the mercy of luck and the good graces of the bank and Discover Network. You’re still pretty much guaranteed a better rate than the Dynamic Currency Conversion though, so always pay in the local currency if you have the option.
5. Moving money to your Apple Pay Cash is free for debit cards, but impossible from credit cards.
Adding funds to your Apple Pay Cash account is extremely easy and free – if you’re using a debit card that’s already in Apple Pay. Credit cards and gift cards, even if you have them in your Apple Pay account, are not able to be used. This is probably because it would essentially process as an cash-advance charge. It makes sense that Apple would not want to deal with the headaches of people getting hit with 20% interest rates.
Final Thoughts
- If you do have a credit card, you’re probably best off just using it when traveling abroad. Most credit cards these days work on Apple Pay, have 0% on foreign transaction fees, and the points and fraud protection are included.
- A good strategy may be to move the money you’re going to use to a Apple Pay Cash card (which you can do instantly, free, from anywhere), and then use it to pay. However, this only really makes sense if you have a debit card that charges more than 3% for international transactions or a flat fee per transaction **and** a percentage, otherwise it’s just another step. As before, just make sure the shop accepts Discover.
- If you are going to try to pay with Apple Pay Cash card make sure the shop takes Discover. Discover credit cards also works with Diners Club International and the Chinese-owned Union Pay/JCB networks. The last two may not be familiar for Americans, but with the astronomical growth of Chinese tourism across Europe, both Union Pay and JCB are more and more widely accepted. I haven’t been able to try out the Discover debit cards on Union Pay/JCB though, so if you do please let me know.
