A key feature of the new iPhone 6 was part of a stand alone segment of the event, and that is Apple Pay. It’s Apple’s new mobile payment solution that uses the NFC chip on the iPhone 6 & 6 Plus to give you a new way to pay with your iPhone. The system lets you connect your credit, and debit cards right into Passbook beginning with the one stored in your iTunes account, with the ability to add new ones by taking pictures. Once your cards are set-up, all you need to do is go to a participating retailer, point your iPhone at the NFC payment terminal, and then confirm the purchase with your fingerprint on the Touch ID sensor.
Apple Pay is all about making it as easy as possible, and Apple has mainly focused on getting companies on board. Apple is working directly with Visa, MasterCard, and American Express for cards, and Bank of America, Chase, Capital One, Citi, Well Fargo, and American Express for banks. Apple is also working directly with major stores including Macy’s, Nike, PetCo, Toy’R’Us, Subway, Whole Foods Market, Staples, McDonalds, Disney, Walgreens, and more. Apple will continue to work with retailers to get new ones on board, but the initial roll out will include over 220,000 retailers in the U.S. Apple Pay isn’t expected to launch until October, a month after the iPhone 6 launches, and it will come to the Apple Watch when it launches in 2015.
Security is a big question mark with Apple Pay, and Apple really emphasized what they’re trying to do to maximize your security. When you use Apple Pay, the system generates a one time use code for a particular transaction, so that the retailer doesn’t get the card number, security code, or your name. When you first add a card, the information is encrypted, and securely stored in the new “Secure Element”, which is a dedicated chip in the iPhone 6, and Apple Watch just for card info. That means your card info is only stored on the device, and the only way to get it is with the device itself, which you can deactivate & wipe with Find My iPhone. Your payment is also guarded behind the TouchID fingerprint sensor, which is another aspect stored on the device only, with no tie to Apple’s servers.
Apple Pay is actually more secure than using the cards from your wallet, as hacks of retailers gather the card number, security ID, and card holder’s name from the scanned magnetic strips. Apple has also built Apple Pay into the way you use apps, and make online purchases. The card info stored on the device can now be used for one touch purchasing in apps, and online when shopping on your iPhone.
Apple Pay has the potential to be big, and it comes down to wide adoption by retailers.