Apple Pay Is Here: Everything You Need To Know

Apple Pay Is Here: Everything You Need To Know

The new Apple Pay will be launched on Oct. 20, Monday in the United States.

Apple Pay basically helps users in making in-store and online payments with NFC-ready iPhone 6 and iPhone 6 Plus smartphones by simply using Touch ID.

Apple Pay's online payment capability will be expanded to the new iPad Air 2 and iPad mini 3 when both become available next week. The in-store payment capability will also work with the Apple Watch when it ships on 2015.

According to Business Insider, Apple announced the mobile payment launch in a streamed online presentation last Thursday; listing 35 retail brands where users can make their in-store payments including Whole Foods, Macy's, McDonald's, Duane Reed, Texaco and others. In addition to those stores, Apple listed 23 other store brands accepting online payments with Apple Pay, including Staples and Starbucks, which today relies upon QR reader technology, not through NFC, for in-store payments to buy coffee.

"We believe Apple Pay is going to be huge," Apple CEO Tim Cook said in his presentation, ignoring the difficulties faced by previous mobile wallet schemes, including Google Wallet and Softcard, formerly known as Isis. 

Apple Pay uses Near Field Communication chips inside the phones that are read by NFC readers available in an estimated 220,000 stores nationwide. A user passes the phone close to a terminal while holding the Touch ID then vibration and beep let you know when the transaction is successful.

Apple supports the credit and debit cards from the three major card companies, American Express, Visa and MasterCard. In addition, more than 500 banks are backing Apple Pay, though Apple named just a few: Chase, Capital One, Bank of America, Citi, Wells Fargo, US Bank, Barclaycard, PNC, USAA, Navy Federal Credit Union and American Express. Those banks represent 83% of all credit card purchasing in the U.S. According to Jordan McKee of 451 Research, having more than 500 banks backing Apple Pay isn't necessarily going to mean much with such a limited number of retailers.

A person's account information, including the 16-digit card number, is not stored on the phone or with the merchant, according to the credit card companies and Apple.

Instead, token technology allows a unique digital Device Account Number to be generated that becomes a proxy for the primary card number, and that Device Account Number is then used in payments. If a phone is lost or stolen, the Device Account Number can be disabled without needing to reissue the primary card. Even though Apple has tightened its security measures more than other digital wallet technologies, analysts said many users will still be skeptical about security with Apple Pay.

McKee said that Apple Pay has a clear advantage over what Google Wallet offered when it appeared nearly three years ago. Users were not so sure how much personal or transaction data Google was collecting when a Google Wallet transaction was made. On the other hand, Apple assured they are not collecting any personal information and they do not know what you bought, where you bought it and how much you paid for it. Apple is not interested in any personal data of the user, and that's very clear to them, which reduces the worries of the users, according to McKee.

Apple Pay is believed to be more secure and surely protects a user's privacy more than the current solutions. More stores will surely follow the trend of this system as the Apple Pay release this Monday. This is another technology brought to us by Apple Inc. This innovation will be unveiled to us on Monday. After that, let us see how useful this will be to everyone.

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