Doesn't use of Apple Pay give banks the option of routing the money/debt thru other means? Chase just announced Pay support, and has been pushing "direct pay" (Chase account to Chase account) for a few years - might they observe that an Apple Pay event is in fact going from (say) Chase account to Chase account via debit "card", so just make the transaction internally and manage to cut Visa et al out of the transaction entirely? And, as such, increasingly avoid the "fundamentally broken payments system"?
I'm not aware of this, but if I were to guess - Chase has a Chase card which they use on a Chase terminal? The terminal would be able to acknowledge this and make the payment without going through any payment network. Most likely, on credit cards, visa/mc/amex would not agree to this on new smart cards. They could be doign it automatically on the terminals without any real interact with the card (mag stripe only?), but with a contactless EMV transaction, I believe it wouldn't be possible since the terminal needs to interact with an app on the virtual card.
Think about a smart card like a phone - you can install multiple apps on it. Credit Card companies most likely won't allow a financial institute to have their own app which will supersede the credit card app when used at the financial institutes terminals. It's possible, in Canada we have Interac and Visa on one card, but not quite the same thing.
