GETTING TO GREXIT…Turning left at Athens

Happy trails to you, until we meet again. ~ Dale Evans

The Greek economy is in serious trouble. Of the 19 Euro-zone (EZ) nations, Greece now claims the most precarious fiscal position. This is not a new situation. Ever since we found out almost 5 years ago that previous Greek governments had been cooking their national books with far worse than grape leaves and lamb, the nation's finances have been at best "fragile."

From the fiscal fallout of these mega-errors Greece received a huge bailout from its 3 primary creditors – nicknamed "the troika" – the European Central Bank (ECB), the 19 Euro-zone finance ministers (the Eurogroup), and the International Monetary Fund (IMF). This bailout allowed the Greek government to stay functioning, but required Greece to seriously reform its wayward approach to doing the public's business and its fiscal accounting. Since 2012 Greece has received total bailout loans of more than €270 billion (B). At the current euro/dollar exchange rate, that's $310B which Greece owes to 7 different groups of international creditors.

Despite being the larger-than-life birthplace of public democracy, Greece is a fairly small nation. Its 2013 GDP was $267.1B, which represents only 2% of the EZ GDP and makes the country's economic output worth about the same as that of the state of Tennessee. Greece has almost twice as many people as Tennessee, offering a perspective on Greek citizens' overall productivity. Greece's GDP has fallen 25% since it initiated the austerity requirements imposed by the troika as a condition of receiving its fiscal bailout. Greek unemployment hovers around 25%, youth unemployment exceeds 50%.

In large part, these austerity reforms spurred Greek voters to elect a new government last month lead by the left-wing Syriza party. Syriza pledged to unilaterally dismiss the loathed "reforms" that increased taxes, forced government agencies and businesses to dismiss workers and generally made economic life worse for many citizens, all in the name of improving Greece's economic productivity and becoming more worthy of the loans. The Eurogroup ministers and Greece have been negotiating before Mar 5, the first of Greece's many days of fiscal reckoning, when Greece will need to repay €1.7B. Because Greece's economy has taken a nosedive – in part due to the imposed reforms – everyone realizes, but is unwilling to publicly state now, the country will not be able to repay all of the loans on time without additional loans.

The first round of these negotiations has been as much public posturing as private negotiations. If all goes badly, it's possible that Greece will exit the Euro Zone, which is termed the "Grexit." Nevertheless, on Feb 20 the Eurogroup announced that despite big, bad Germany's vocal trepidations, the Eurogroup offered a conditional 4-month extension of the Greek fiscal bailout. On Feb 24 the Eurogroup accepted the Greek government's latest bailout (extension) plan. The clamor surrounding these negotiations has heightened because of the size of the debts owed, the political divergence between the new, anti-austerity Greek government and the powerful EZ austerians (primarily the Germans, with strong support from Finland and the Netherlands) and the symbolism surrounding the euro currency's viability.

Unlike America's 2007-08 credit crisis that was initially founded on real-estate speculation, the troika cannot just foreclose on Greece's delinquent bankers (including the government's central bank) and, in effect, put the nation up for sale. Given the intricate rules and procedures involved with all euro-zone policies, the Greek negotiations weigh euro-zone credit regulations against Greek accountability. On principle, every European politician, including even Germany's Chancellor Angela Merkel the queen of austerity, has stated Greece should not abandon the euro. And, after admitting to excess fiscal expenditures, Spain, Portugal and Ireland have each swallowed the bitter austerity policy pills administered to them by the Eurogroup. Really, why should Greece get special treatment just because the Olympics began there?

Ironically, Germany may particularly benefit from Greece's travails because the euro has depreciated more than 13% in the last 5 months relative to the dollar, in part because of this latest "euro crisis." So travelling to Europe for Americans will be much less expensive this summer than it has been in years; and the cheaper euro will mean more German-made and exported Porsches, BMWs and Mercedes (as well as exports from other euro nations) will continue to grow. When they think about it, having Germany's net exports rise on the shoulders of still-unemployed Greeks will not likely sit too well with Athenians. Interestingly, there is no other major economy that can top Germany's exports as a share of GDP, at 46.6%. China's is 26.4%; the US's is 13.5%.

Although this latest 4-month extension agreement seems to offer some timely political expediency, it really just kicks the fiscal can down the viaduct. At some point the Eurogroup ministers and Greece will have to acknowledge and face three fearsome, related realities. First, significant structural reforms will need to be quickly and irrevocably implemented in Athens and the rest of Greece – and not merely discussed. Given their electoral platform, how the leftists of Syriza can get their political compatriots – and citizen-voters – to swallow these changes is very uncertain. If Syriza sticks to its perceived mandate, a Grexit won't be so far away. Second, even with such reforms, it's very hard to imagine Greece's creditors not eventually getting a haircut (not receiving all of their loans due to be paid back). No one wants to be first in the fiscal haircut line. And third, austerity policies even if they could improve public efficiency (which is not at all a given), have created such wide-spread wreckage that it's not clear the pain is worth the possible gain.  

The trails ahead for Greece and the rest of the Eurogroup are unlikely to be happy ones in the next year, no matter how many times they meet again.

THE MIDDLE CLASS. WHY VIRTUALLY EVERYONE'S IN IT.

Upper classes are a nation's past, the middle class its future. ~ Ayn Rand

President Obama's January 20th State of the Union speech (since every action in Washington seems to require an acronym, his speech is the SOTUS) was characterized by the White House and then the media as addressing "middle-class economics." It's a politically smart focus, especially because there have been lots said about the denouement of the middle class, its "hollowing-out" and its on-going struggles. Even Republicans are extolling "middle class economics," since they (mistakenly) believe they've been vaccinated against shameless duplicity – endemic to GOPers.

Because it's once again a focus of our political nobility, being middle class is in the news. So how does one qualify as a "middle-class" American? Alas, there is no single definition of "middle class," a social, cultural, economic, and of late, political concept that has been central to American's self-image for a long time. A recent survey by the Pew Research Center indicates that nearly 90% of respondents judge themselves to be some version of "middle class," which defies math and statistics, but is a truly-held belief for lots and lots of folks. This survey result echoes Garrison Keillor's Lake Wobegon residents who are all "above-average." It also reflects the ever-broadening characterization of who is middle class, especially at the top end. At this point, almost everyone's middle class, which suits politicians just fine.

One traditional foundation of our middle class is to define it by one's annual income. By calculating what the median income^[1] is for the US we can determine a central point of the middle-class. So what is the median income in the US? Excellent question; unfortunately there are multiple answers, depending on how you measure income, as shown in the following table that shows 3 different median income calculations.

Table 1:  US Median Income

Measure of Median Income	Amount	Year	Source
Household income	$52,250	2013	US Census
Annualized real weekly earnings	$40,768*	2014Q1	Dept. of Labor
Adjusted gross income	$36,055	2012	Tax Foundation

* In 2013 dollars.

Median household income is the most often used way to gauge middle-class income, and provides the highest measure of median income, $52,250. But weekly earnings for full-time workers (there now are 104.3 million full-time workers according to the Department of Labor) and adjusted gross income (AGI) from your Federal income tax form 1040 are well-known and -regarded alternative measures of income. As Table 1 illustrates, even determining a mid-point of middle class income is perplexing as there's a 40% difference between $36,055 (AGI) and $52,250 (Household Income).

One gloomy finding is that real median weekly earnings have not increased in 10 years; they're now virtually the same as they were in 2004. Adjusted gross income includes not just wages and salary but income from interest, dividends, capital gains (that collectively comprise "investment income"), business and pension/retirement and other sources. Unsurprisingly, personal income from investment is 46% of total 2012 AGI for those with income exceeding $1 million. For people whose total AGI is less than $100k, investment income is 3%. With AGI between 100k to 200k, investment income is almost 4% of their AGI. Why median AGI is so much lower than Household Income is puzzling.

But there is a range of income that encompasses the middle class, not just the mid-point (the median). An often-cited income range for the middle class is $25,000 to $100,000/yr. The lower bound of being "middle class" frequently employs the federal "poverty-level" income (FPL) or a multiple of FPL, which varies by family size. In 2015, the FPL for a 4-person family is $24,250. This poverty-level income is used as a basis to determine eligibility for certain public programs and benefits. For example, the federal Affordable Care Act defines a lower and upper AGI range for people to receive premium savings (e.g., subsidies, discounts or tax credits). If a family of 4 people has an AGI of $23,850 to $95,400, they can qualify for lower premiums at the Health and Human Services' federal marketplace healthcare website.

Defining what the upper-end of middle-class income is far more fraught. Politicians, among others, offer an expansive view. In speeches during his run for his second term, President Obama has said “the rich” are those who make $200,000 or more as individuals and $250,000 or more as households; adeptly implying that those households making less than $250k are not "rich," and thus middle class. Remarkably, this upper-range was also cited by Mitt Romney when he was a presidential candidate. Stretching the middle class to include households whose income is $250k means the middle class includes families within the top 3% of all income earners. It may be good politics, but it's wholly unsound economics and math.

After his election, when President Obama and the Republicans were negotiating how the government would not push itself off the infamous "fiscal cliff," they agreed that "the rich" really made a lot more money and raised the definition of “rich” to $400,000 for single people and $450,000 for couples. Making $450k places a household in the top 1% of all earners, nationally. Whether it's $200k or even $450k, that's a very spacious upper-end definition of middle class.

Culturally, being part of the American middle class is tied to several keystone fixtures beyond income. These fixtures include owning a home and sending one's children to college. Home ownership peaked in 2004, when 65% of Americans were paying mortgages for their domicile. Now, after the housing bust, just 64% own their homes, and a rising 34% of middle-class people say they'd rather rent than own if it were time to move.

However, a college education remains highly-sought after. It is closely intertwined with the American Dream, prominently wished for by all of us perhaps especially by middle middle-class folks. Sending our kids to college to improve their future prospects has become more of a perceived necessity rather than an option, given the lethargic growth in even middle-skilled jobs and wages. Thus, the president's middle-class economics plan included proposals to broaden the affordability of college education.

Any change federal tax policy to strengthen the middle-class' economic situation and make college education more affordable should be a bipartisan slam dunk. Nope. Exhibit A is the response to the president's proposed change to benefit middle-class citizens in their efforts to save for their kids' college expenses. He briefly mentioned this proposal in his SOTUS, which was to reform tax-free higher-education savings (aka, 529) plans so more benefits would be focused on "true" middle-class folks.

The president's proposal was to eliminate the tax-free status of 529 plans and instead broaden an existing educational tax credit – the American Opportunity Tax Credit (AOTC) – that would provide more money than 529 plans for lower- and middle- middle-class families to cover their kids' college costs. The AOTC would be phased out for families with incomes greater than $180,000. The AOTC is used far, far less than 529 accounts. And that's saying something because less than 3% of US households even have a 529 account. Not mentioned at all was that about 70% of all undergraduate college students use loans to finance their educations. Thus, reforming student loan policies – like making the loans' payments depend on the income of the newly-graduated person (so-called Pay-As-You-Earn (PAYE) loans) – would likely have a more pronounced benefit for true middle-class families for lowering the costs of higher education than changing 529 plans. Oh well.

The White House stated that 70% of balances in the college accounts were held by families making at least $200,000 a year. Others stated that more than 70% of the total number of accounts are owned by households with incomes below $150,000. The average 529 account balance in 2013 was $19,584, which as all you tuition-payers know might cover, at best, one year at an in-state public college/university.

This White House proposal was the target of vehement criticism across a broad political spectrum, with lightning-quick disapproval from both John Boehner and Nancy Pelosi. Less direct condemnation was spread by the financial industry, which manages 529 accounts and often receives hefty fees for that service. Why? Because 529 plans are popular, despite their low numbers. There is over $240 billion in 529 accounts, and to listen to the criticism, each and every one of these accounts are held by certified middle-class citizens. Certainly many "middle-class" folks have money in 529 accounts, but as the White House pointed out, the benefits of such accounts disproportionately accrue to people in the upper reaches of the middle-class.

Unfortunately, there is enough of a middle-class patina on 529 plans to ensure the president's proposed 529-plan educational benefit reform entered face down into the political waters without even getting its toes wet.

This episode illustrates several inter-related issues in dealing with the "middle class economics." First, there's the difficulty that I've discussed above: defining who resides (or more to the point, who doesn't reside) in the middle-class. From a political perspective, we're virtually all middle class, even families who make $450,000. Silly me; I thought the middle class was a state of economics, not of mind. Second, paying for tax reform that can assist "middle class" people, a goal virtually all politicians pay at least lip service to achieving, is fiendishly difficult. Because tax reform usually means some folks will be winners (who get the benefits) and some will be losers (who pay more taxes).

If the middle class embraces virtually everyone – each of whom want to be tax reform winners – then it's next to impossible to offer benefits to households whose income is far closer to the $52,250 median income. There are simply not enough families who earn over $250k to provide tax revenue to assist middle-middle-class families, whether it be for college education or any other fiscal benefit to make their lives less fraught.

P.S., If you're interested in seeing where in the middle class your income places you, go here.

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[1] Median income is the numerical value separating the higher half of a distribution of income from the lower half.

GIVING CREDIT WHERE IT'S UNDUE? NO.

Austerians want tribute for doing nothing.

Republicans demand praise for the US's modestly-growing economic pie, despite trying to shrink it. It's an Olympian level of chutzpah. Several news reports, including this one, recently stated that the GOP wants some credit for getting the US economy growing once more. To me it's an unassailable example of the GOP leadership suffering from political Alzheimer's. John Boehner, Mitch McConnell and their congressional amnesiacs expressed upset that President Obama has received (deserved) praise for helping to lower the unemployment rate – now at 5.6% - and increase the GDP's growth – now at 5%.

In my book, their consistent efforts to thwart the Obama administration's every attempt to increase government spending and offer vital economic benefit for middle- and working class citizens earns them a leaden medal, certainly not a bronze one.

Speaker Boehner actually criticized the administration for average hourly wages failing to increase. It's yet another example of the GOP's empty fiscal pot calling the economic kettle black. After all, the Republicans have stymied any rise in the federal minimum wage, as well as predominantly opposed increases in state-based minimums. Ominously, their new control of Congress will likely result in Congress doing nothing to help the majority of Americans escape continuing economic challenges. Why? Because they're "austerians."

Austerian is an inventive term applied to politicians (and economists) who have dogmatically stuck to austerity-focused public policies – ones that reduce debt and government expenditures – despite elevated unemployment and frail growth. Austerians in Congress have prevented needed expansionary fiscal policy efforts from being enacted during the past 5 years and regularly raised the fearful specter of high inflation if the government spends more on unemployment support, infrastructure or education. Their fears are completely unfounded. How much have overall prices increased during our fragile recovery? The latest Consumer Price Index increased 1.3% on an annual basis. That's almost 50% lower than the Federal Reserve's 2% inflation rate target. With broader austerian policies in place, Europe is actually experiencing deflation, elevated unemployment and an incipient recession.

Austerians include virtually all GOP and Tea Party members in Congress, as well as several governors; including Sam Brownback in Kansas whose disastrous fiscal efforts have burdened everyone in the Sunflower State. Other members of the austerian alliance include foreign heads of state like German Prime Minister Angela Merkel. In 2 weeks she'll likely face another show-down with a new Greek government. This face-off could lead to the Grexit (the departure of Greece from the Euro-zone), if the European Community (economically lead by Germany) doesn't re-negotiate with Greece and it defaults on its loan obligations. Once again, we'll see who blinks first, and whether her long-standing austerianism bends at all. I bet not.

The nascent Austerian school of economics, just across the philosophical border from the Austrian school of economics, is populated with conservative economists and similarly-minded politicians, who aren't burdened by the facts of recent history. In sum, the austerians have done nothing to get the economy growing again (or improving the lives of 99.5% of its citizens). Austerians have been myopically focused on halting the Affordable Care Act, increasing income and wealth disparity and ending nonexistent inflation.

Yet they want credit for doing worse than nothing. It's enough to turn a skeptic of American politics into a true cynic.

PAYING WITH APPLE PAY

Any sufficiently advanced technology is indistinguishable from magic. ~ Arthur C Clarke

Apple Inc., the world's most valuable company with a market value of $668 billion, is used to making piles of money. If you were smart (or lucky) enough to own 100 shares of Apple Inc (APPL) on December 12, 1980 (which was then worth $411), and you wisely decided to hold onto them; your 5,600 shares – after 4 splits – now (as of 12/26/14) are worth $638,344. A beautiful example of an individual benefiting from capitalism. Nice going.

In October, Tim Cook presented Apple Pay to the world, in Apple's attempt to make more money. Apple Pay is Apple's ambitious version of a mobile payment or digital wallet system. Mobile payment systems that have been previously offered by Google, PayPal, Square and others have met with, at best, tepid interest on the part of retailers, financial services providers and most importantly, the paying public. But being Apple, its new mobile payment system is the talk of the tech and financial towns. The digerati are all over themselves saying that Apple Pay will soon lead to "the end of cash." Given its impressive success over the decades, it's prudent not to bet against Apple, but…

Perhaps it's a measure of my ever-lengthening separation from whatever the media and techno-cognoscenti decide is "the next best thing," but the attention given to Apple's endeavor to change how the public pays for stuff – via Apple Pay – defies reality in my mind. It's also possible that I'm a stick in the fiscal mud when it comes to salivating over yet another way to buy my Peets coffee. Oh well. Myriads of stories have been seen and heard about how Apple Pay will usher in the cashless society for everyone's benefit. The New York Times alone ran 2 dozen stories about Apple Pay since it was first presented on October 20th. The happy hype that the digerati are preaching is way ahead of what's really happening.

To begin with, last year consumers spent $1.6 billion using contactless mobile payments of the sort allowed by folks flapping their iPhone 6s with Apple Pay in stores, according to estimates from eMarketer, a market research firm. On its face, this seems like a lot of purchases (and it is), but $1.6B represents a mere 0.6% of all e-commerce spending and an infinitesimal 0.0037% of in-store retail purchases. Apple and its mobile payment system partners have a lot of ground to cover. The media buildup about Apple Pay precipitating the end of cash is impetuous. To paraphrase Monty Python, cash is not dead yet.

Any mobile payment system involves 4 vital sets of actors – the mobile software itself (here, the Apple Pay app on your iPhone 6), the participating retailers who have installed point-of-sale (POS) terminals that are compatible with the software, the financial institutions that process the transactions and the paying public. In order for Apple Pay to be successful, it has to lead a mobile minuet that each of these players want to dance to. The first 3 stakeholders need to strongly support and market the system so that the consuming public will be convinced to use the app to buy stuff. If there aren't enough retailers with compatible terminals (as is the case with Google Wallet, Square and PayPal), then there's not sufficient incentive for people to use the app and thus no real network effect to induce other stakeholders to adopt the system behind the app.

As one e-commerce payment systems analyst said regarding Apple Pay, "Apart from the cool factor, there’s really not a lot of value for the average merchant.” This is part of the reason behind Apple's initiation of a large advertising push to use Apple Pay. Together with MasterCard and Visa (the 2 biggest credit card payment processors), giant banks like Bank of America, Chase and Wells Fargo and prominent retailers including McDonald’s, Walgreens and Macy’s, Apple's advertising hopes to entice IPhone 6ers to buy stuff with their phones. But other major retailers like Best Buy and Walmart have stated they will not accept Apple Pay. These retailers, along with CVS Pharmacy, Rite-Aid, 7-Eleven and others are backing their own mobile payment system, CurrentC. If Apple et al. can't convince retailers to install Apple Pay compatible POS terminals, then it's not going to lead to success for Apple Pay.

For some perspective, let's see how we pay for stuff now, and learn what fiscal mechanisms Americans use to buy goods and services. Predictably, we purchase a whole lot of goods and services; in 2014Q3 annual consumer spending of all kinds was $10.97 trillion, which represents almost two-thirds of our GDP.   

The figure below shows the share of transactions people use for each payment type in late 2012 – cash, check, credit card, debit card, and electronic –by number of payments and value of these payments made by customers who buy everything from cappuccinos to vacuum cleaners.

 

Since 2000, the number of transactions using checks has steadily plummeted, dropping by half; so by late 2012 only 7% of all payments used checks. During this 12-year period, the number of transactions using debit cards mushroomed 9-fold. Credit cards' usage increased also and represents the 2nd most often used form of non-cash payment. After the first credit cards – BankAmericards – were issued in Fresno in 1958, they've become ubiquitous. [FYI, BankAmericards' name was changed to Visa in 1977. The first mention of the term "credit card" happened a very long time ago, by Edward Bellamy in his classic utopian treatise, Looking Backward, published in 1887.]

By 2012 the largest value of payments used either credit or debit cards, as shown in the above figure. However, cash (remember cash?) remains the single most often used payment type. Why? Because cash dominates payments for the multitude of small-value transactions; representing 40% of all transactions, but only 14% of the total value of these transactions. As seen in the figure, credit and debit cards and electronic payments ( which for the most part mean those made online, almost always using a card) account for much high-value transactions; checks also are used for higher-value transactions. Card and electronic payments account for 49% of the number of payments, but 61% of the total value share.

There are 3 "divides" present in payment preferences. First, from the above figure we can see there's an important value divide when it comes to how people pay for stuff. With small-value purchases, cash payments usually predominate; for higher-value purchases cards and electronic payments prevail. Next, there's a generational divide surrounding payment preferences. According to a recent survey, just 30% of folks under 30 said they'd use cash for smaller purchases. Forty percent of these people preferred using debit cards, but only 25% of people over 60 said they'd use a debit card.

Last, there's an income divide. Income exerts a strong influence on payment preference; folks with lower incomes use cash more frequently. From the San Francisco Federal Reserve Diary of Consumer Payment Choice study, 55% of consumers with household annual incomes less than $25,000 prefer cash over non-cash payment types, while those households making more than $200,000 exhibit a very strong preference for credit cards. The preference for cash declines sharply once household income exceeds $25,000 per year, with debit cards cited as the preferred payment instrument for all those in household income groups between the two extremes.

Consistent with these payment preferences, the highest-income earners use credit cards for more than 40% of their monthly transactions – much more frequently than any other payment option. This is likely because more affluent consumers tend to have better access to credit and financial services and can take advantage of the incentives card issuers offer for using credit cards. It's this group, together with younger people, that mobile payment systems' operators like Apple Pay are targeting.

Moreover, Apple's entry into retail payment systems may be banking on up-coming changes facing credit and debit cards. In October 2015 the fiscal responsibility for liabilities resulting from fraudulently-used credit and debit cards will shift from the card companies to the retailers themselves. This is no small matter, and why Apple and other suppliers of POS payment systems are loudly proclaiming their new systems' "enhanced security." This legal change will create significant incentives for retailers to replace their existing POS terminals – the "card-swipe" devices that retailers employ to authorize a customer's purchase. This change is why many newly-issued credit and debit cards have so-called smart chips in them, which creates an added level of security. New terminals will use the card's chip, not the strip, for authentication. As long as the retailers are changing out their terminals, Apple obligingly suggests, why not go whole hog as it were and use Apple Pay, with no card required at all. Nice timing.

There's also the issue that Apple Pay only works with iPhone 6s, Apple Watches and certain iPads. [The Apple Watch will be introduced in early 2015. And waving an iPad to buy a CFL at your local hardware store seems improbable, at best.] IPhones certainly occupy an important part of the smartphone market, but only a part. And that portion has been slipping as Android-based phones have captured a larger share of the market. According to Pew Internet, 56% of adult cellphone users have a smartphone. Apple expects to sell over 40 million iPhone 6s this quarter worldwide, so the share of this 40M who are American iPhone 6 purchasers is the underpinning of Apple Pay possibilities.

Finally, there's the issue of personal transactions data. If Apple Pay eventually comes into widespread use, then Apple will be privy to highly personal information about every Apple Payer's purchases that now only the financial institutions and credit card companies receive. These data are highly coveted and valuable. Apple already has access to multitudes of retail purchase information about their customers, through iTunes and their device sales, but Apple rightly expects Apple Pay transactions will be far, far broader should it become popular. Whether or not this further dispersion of retail  purchase data is appropriate or not is impossible to assess now. But I hope Apple's data security systems are being strengthened in anticipation of this possibility. Jennifer Lawrence, among others, would certainly suggest such strengthening is warranted after the September iCloud security breach.

Will most of us pay with Apple Pay in the near future? My bet for the future is that although cash may no longer be the high sovereign of the retail store counters, it will continue to be widely used for certain types of purchases, despite Apple's and the digerati's entreaties, as will debit and credit cards. If Apple can convince us that their app is both more secure and less troublesome than using a smart-chip card, then Apple Pay may become a prince of purchasing.

But the central challenge that Apple and its Apple Pay partners confront is that buying things with a credit or debit card is not nearly as arduous and burdensome a process as they make it out to be. It's actually quite straightforward and almost unconsciously used by millions and millions of people each day. And the prime mission of 2 key Apple Pay partners – Visa and MasterCard – is to promote the buying public's continued use of cards, not waving iPhones.

It's game on for the magic of paying with Apple Pay.