Can Apple Pay Transform how People make Mobile Payments?

A few days ago, Apple announced Apple Pay, a new category of service that will transform mobile payments with an easy, secure and private way to pay. Ever since the announcement came in, there has been a lot of buzz and media attention on this feature. Some were amazed and many did complain that, Google had introduced the Google Wallet and the supporting system based on NFC on Android Smartphones almost 3 years ago. Some even quoted, Apple was too late to introduce NFC in their hardware.
Does Apple beat all these negative feedback and produced something remarkable? Well, the answer is a big YES. One simple reason is Apple was successful in building an Ecosystem, not just the Technology. That’s exactly where Google couldn’t impress; they left it to the developer community to build more apps leveraging the NFC and Wallet; but hardly there was any motive in the industry especially from the retailers.

Attention to detail has always been the USP of Apple and they never fail to create an impact.

Near-field communication is a set of standards for smartphones and other mobile devices to establish radio communication with each other by touching them together or bringing them into close proximity, usually no more than a few centimeters. – Wikipedia

Apple Pay works with iPhone 6 and iPhone 6 Plus through a NFC antenna design, a dedicated chip called the Secure Element, and the security and convenience of Touch ID. When Apple introduced Finger-Print sensor on the iPhone 5S, not many people realized the road-map of this chip in-place. For a year we used the Touch ID to just unlock our iPhones and purchase apps; but now, you can pretty much manage your bills and payments. Apple Pay is easy to set up, so hundreds of millions of users can simply add their credit or debit card on file from their iTunes Store account and add it to their passbook.


Apple Pay supports credit and debit cards from the three major payment networks, American Express, MasterCard and Visa, issued by the most popular banks including Bank of America, Capital One Bank, Chase, Citi and Wells Fargo, representing 83 percent of credit card purchase volume in the US. In addition to the 258 Apple retail stores in the US, some of the nation’s leading retailers that will support Apple Pay include Bloomingdale’s, Disney Store and Walt Disney World Resort, Duane Reade, Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens and Whole Foods Market. Apple Watch will also work at the over 220,000 merchant locations across the US that have contactless payment enabled. Apple Pay is also able to make purchases through apps in the App Store. This strong eco-system builds it up for the Apple Pay.
card-number-not-savedApple Pay will change the way you pay. When you add a credit or debit card with Apple Pay, the actual card numbers are not stored on the device nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your iPhone or Apple Watch. Each transaction is authorized with a one-time unique number using your Device Account Number and instead of using the security code from the back of your card, Apple Pay creates a dynamic security code to securely validate each transaction.

Security and privacy is take care as well. When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, and hence helps reduce the potential for fraud. Neither does Apple collect your purchase history, nor the items you bought, where you bought it or how much you paid for it.

If your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device. You do not need to call up the bank to cancel the credit-card, as no one would be able to use your stolen iPhone and use your card details.

Online shopping in apps with iPhone is also as simple as the touch of a finger. Users can pay for physical goods and services including apparel, electronics, health and beauty products, tickets and more with Touch ID. Checkout can happen with a single touch, so there’s no need to manually fill out lengthy account forms or repeatedly type in shipping and billing information, and card details are kept private and are not shared with the online merchant. Simply make your selection and when ready to buy, use Apple Pay to complete the transaction. Apple is promising more-secure transactions than the plastic cards most consumers use today.

Apple Pay could help resolve the frauds w.r.t Mobile Payments and data breaches. This can also be a simple substitute to the 2 factor authentication and OTP as well.

Starting in October, with iPhone 6 and iPhone 6 Plus, Apple Pay will be available in the US as a free update to iOS 8. Apple Pay will work in stores with iPhone 6, iPhone 6 Plus and Apple Watch. Apple Pay APIs will be available to developers in iOS 8 so they can enable purchasing physical goods within their apps on iPhone 6 and iPhone 6 Plus. Apple Pay will also work with the newly announced Apple Watch, extending Apple Pay to over 200 million owners of iPhone 5, iPhone 5c and iPhone 5s worldwide.

To learn more on Apple Pay, have a look here.


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