PHOENIX – Even though Apple has more than 500 banks lined up to support Apple Pay, including heavyweights like Bank of America and JPMorgan Chase, some bank executives are taking a decidedly defensive stance.

Apple collects a fee from banks that participate in its mobile wallet, and signing up with Apple is "the most one-sided agreement I have ever seen," said Michael Battagliese, senior vice president and head of debit and emerging markets for Citizens Bank. Battagliese made it clear that his comment reflected his opinion, and not necessarily that of his bank. He did not disclose Apple's fees, but they are reported to be 15 basis points on interchange for credit card transactions and a half cent on debit.

"It will be interesting to see what will happen if Apple were to come back and say they wanted more in the future," Battagliese said during an Oct. 21 presentation at SourceMedia's PayThink conference.

Banks need to make sure their payment cards stay "top of wallet" in transactions initiated through Apple Pay, but Apple provides no way for any particular card to rise above the rest. By default, Apple Pay uses the first card consumers enroll, regardless of whether it is the best choice for a particular purchase.

Smaller banks lack an incentive to support Apple Pay payments, Battagliese said. "It would be mixed results because the bank would be making something less than what it was making before with those transactions," he added.

Banks also need to analyze their debit portfolios to determine how many accounts are active in Apple's iTunes digital content market, said Leanne Hughes, head of debit and alternative financial solutions for M&T Bank.

"It's a retention play, not just for iTunes purchases, but in all Apple Pay scenarios," Hughes said.

If a bank's card is top of wallet in iTunes, the marketing department at that bank will concentrate on assuring that carries over to Apple Pay, Hughes added.

M&T Bank hopes Apple involves its bank partners in some type of loyalty program linked to the iPhone's Passbook app, Hughes said. Apple Pay does not currently have a built-in rewards program; instead, Apple is emphasizing its mobile wallet's security.

"I'm not convinced that rewards alone will do it [make Apple Pay successful], but it will be convenience and security," Hughes said. "This is a prime time for security."

Fifth Third Bank will also be on the defensive regarding Apple Pay, especially as it relates to where the bank's brand will fit in during an Apple mobile transaction, said Sue Grathwohl, vice president and director for debit, prepaid & HSA products for Fifth Third Bank.

In a separate presentation, industry analyst Richard Crone said that during the process of enrolling into Apple Pay, he counted 26 “brandable impressions” of Apple during the process, but only three for the participating bank.

However, Apple Pay should cut down on fraud, Grathwohl said. It uses tokenization to protect account data, and "the token will alert the issuer that the transaction came from a specific iPhone," she added.

But even with this security assurance, it is not certain that Apple Pay can move the payments industry to a single mobile payment standard, Grathwohl said.

With various mobile pay technologies taking hold, such as the QR code method being embraced by major retailers in the Merchant Customer Exchange, "it's kind of like the Wild West out there, but it will come down to consumer demand," Grathwohl added.

For now, the iPhone and its Apple Pay capability represent a "shiny new toy" that some consumers will want to try, Battagliese said. "I am still concerned about what will happen if it doesn't work," he added. "The consumer will think he could have swiped or inserted a card in the time it took."