So the internet came to a standstill on Tuesday night (literally for some) as Apple’s yearly Autumn product launch predictably took over everyone’s newsfeeds for a few hours. But, despite the hype over a bigger phone and the launch of a smart-watch, the most far reaching element of the announcements might turn out to be something a bit more practical.
The concept of smartphone payments has been on the precipice for the last few years in most of the developed world, looking for a catalyst to kick it into the mainstream, and with Apple’s weight behind it, we could be about to see some serious movement in this space. So forget about the new phone and smart-watch for a minute, and get up to speed on the ins and outs of Apple Pay. Here’s what you need to know.
- Apple Pay will let users pay for items at retailers that accept contactless payments by authenticating the transaction with just their fingerprint.
- This is facilitated through an NFC (Near Field Communication) chip which Apple has finally gotten around to adding to the iPhone.
- Apple Pay will only work with the iPhone 6 and 6 Plus as only those models include both the fingerprint scanner and the NFC chip. However, users will be able to use the service via the iPhone 5, 5S and 5C when paired with the NFC-ready Apple Watch.
- Credit cards are stored in the Passbook app. Card information is stored on the device, not in the cloud. This might allay some of the fears that users have after last week’s celebrity nude photo leaks.
- If you lose your iPhone, you won’t have to cancel your cards. You can use Find My iPhone to suspend payments just for that device.
- Individual transaction numbers are created for each purchase so no actual credit card numbers are used for enhanced security.
- Also, Apple won’t know what you bought, where you bought it and the retailer won’t get to see your name or card number at the point of sale like with a credit card.
- It will work with the three major payment networks: MasterCard, Visa and American Express. The end users’ bank will need to support Apple Pay as we’ll as the payment processor.
- It will be accepted in 220,000 retail locations on launch. These are retailers that already accept contactless payments.
- Merchants in the US will have to upgrade their POS hardware this year anyway with the launch of Chip & PIN cards in the States. These new POS terminals also accept NFC payments too which should further facilitate adoption.
- Retailers that will accept Apple Pay on launch include McDonalds, Starbucks and Disney World. Plus, users will be able to pay for things like Uber rides without creating an account.
- The credit cards that you already have on iTunes will automatically be added to Passbook. You can also add cards by taking a picture of them with your camera.
- Apple won’t charge users, merchants or developers to use Apple Pay for payments. They will collect fees from banks for any payments they facilitate.
- Irish-founded online-payment company stripe are integrated into Apple Pay to facilitate one-touch payments in iOS apps (their second big partnership announcement this month after the launch of the Twitter ‘Buy Now’ button).
- It will only be available in the US initially from October. No word yet on the international roll-out
If anyone is able to finally drag mobile payments into the mainstream it’s Apple. It’s both about persuading physical retail stores to facilitate mobile payments and encouraging consumers to start using it. Apple have serious form in bringing industries and end users together in new spaces so if anyone can do it, it’s them. Although, if you run out of battery, you better have some cash or a card handy!