The big story
pple CEO Tim Cook and his team introduced the iPhone 6, iPhone 6 Plus and Apple Watch on September 9, where they also introduced mobile payment system, Apple Pay.
Apple’s leap into payments looks promising; a June 451 Research survey found one in four consumers would be “most likely” to use a mobile wallet from Apple. Forrester Research estimates Americans will spend $90 billion through mobile payments by 2017, up from $12.8 billion in 2012.
Apple currently holds more than 800 million iTunes accounts with linked credit cards and already has a payments infrastructure to handle app and media sales. It’s now working with American Express, MasterCard and Visa to offer a mobile payments service, which it’s developing with banks and retailers to launch in October in the US and internationally at the beginning in 2015.
Apple Pay works with iPhone 6 and iPhone 6 Plus, or with 5-series iPhones and an Apple Watch. It uses NFC, a dedicated chip called the Secure Element, and Touch ID. Enter your card details into the system once and, in the future, you’ll be able to make payments at participating retailers online and on the high street. “Security and privacy is at the core of Apple Pay,” said Apple’s internet chief, Eddy Cue. “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, helping to reduce the potential for fraud.”
Highly secure, Apple Pay relies on devicespecific tokens (your actual credit card details are not stored by Apple or the device). Barry McCarthy, president of financial services at First Data, told PaymentsSource: “The [primary account number] is never transmitted to the phone… which makes it difficult for the bad guys to steal the PAN in flight.”
If you lose your device, Find My iPhone will suspend payments from your device if you put it in Lost Mode. You’ll not need to replace your card, just create a new token. “Consumers can be confident their Apple Pay transactions will be private, safe, and secure,” said Morgan Reed of the App Association.
What does Apple Pay cost? Apple says shoppers and retailers won’t have to cough up any additional payment-processing charges, instead it appears to have reached deals with providers that enable the company to take a