Sunday, September 14, 2014
Along with two new iPhones, Apple has ambitiously made the way you pay for things so very easy by creating Apple Pay!
What it is...
With Apple Pay, you'll be able to pay for things in any physical or online retail store using a contact-less touch system. When you make a purchase the retailer does not see your name or card number and even better, Apple collects no purchase history.
A Token element...
I apologize if this gets to tech speak here, but here's how this works; Apple Pay uses NFC (Near Field Communication), the Secure Element and Touch ID. You enter your credit card details into the system which confirms your card with your bank, and creates a unique Device Account Number (aka a token), this is held in the Secure Element on your device. Your transactions are authorized using the token and a one-time dynamic security code.
Devices that will be able to use Apple Pay include...
Apple Pay will be available on the iPhone 6 and iPhone 6 Plus. It will also works with iPhone 5, 5C and 5S devices but will require an Apple Watch.
Scan your credit card in with your devices camera...
Now I'm not certain just how secure this process is, but you can pre-load your credit card into your iPhone using your camera. Once approved the card appears in the Passbook app.
Apple Pay and Apple Watch...
Coming early next year, Apple Pay will work with your Apple Watch once you enter your passcode. Now this part is very cool, if you remove your watch payments are suspended until you put it on again and re-enter the watch code. Nice!
What happens if I loose my device?
If you loose your iPhone, the Find My iPhone app will suspend payments from your device once it is placed in Lost Mode. You will not need to replace your card, just create a new token on the device.
Because transactions are validated using dynamic codes it impairs or blocks hackers from scanning and stealing account details during a wireless transaction. According to Morgan Reed, of the App Association, "Consumers can be confident their Apple Pay transactions will be private, safe, and secure."
Info NOT stored in iCloud (or any other cloud for that matter!)
The essential credit card data is not held in the iCloud, making it extremely secure. Google Wallet's failure was due to the fact that it held this highly sensitive data in an insecure cloud.
Where Can Apple Pay be used?
At first, Apple Pay will be available in the US, where American Express, Visa and MasterCard and most of the biggest banks support it at over 200,000 shops. Mastercard says such payment services will be widely available in 12-18 months.
What will this cost the consumer?
Apple will be taking a processing fee from banks. The amounts are large, and Apple may gain close to $30-$50 million in added income on existing iTunes purchases, and the best part, it costs you nothing!
Apple Pay will be awesome when you are price comparing sites; look at an item in a store and if you find it cheaper somewhere else, order it there!
Both PayPal and Square have said they will support Apple Pay within their services. Apple Pay is expected to launch in the US in October, and internationally in the very near future.