Apple has announced Apple Pay, an NFC-based mobile payments system that’s built in to the iPhone 6 and iPhone 6 Plus.
Apple Pay is arguably Apple’s boldest move yet. NFC-based mobile payments have threatened to transform the way in which we shop every since Eric Schmidt whipped out a Nexus S at Web 2.0 Summit way back in 2010.
Since then we’ve seen Barclays and Samsung attempt to get it right with Tocco QuickTap and EE build on that with Cash on Tap. But no-one has been able to convince the public to adopt mobile payments en masse. Perhaps until now.
Apple Pay: What is it and how does it work?
Apple Pay effectively replaces your wallet by letting you store individual credit cards in Passbook, the same app that lets you store things like boarding passes and vouchers and access them on your phone.
Using the NFC chip built into the iPhone 6, iPhone 6 Plus and Apple Watch you’ll be able to pay for things by selecting the card you want and tapping the phone on a reader at the checkout, exactly like you do when paying for things with a contactless card. Payments are confirmed with a press of your digit on the Touch ID sensor.
And that’s it. No signatures, no PIN entry, no retina scans, no DNA samples.
Apple Pay: What kind of cards can I use with it?
Apple’s senior vice president of Internet Software and Services Eddy Cue revealed that American Express, MasterCard and Visa will all work with Apple Pay.
Apple Pay: How can I add cards?
Card details already used for iTunes and App Store purchases can be added directly to Apple Pay.
To add new cards, simply take a picture of a new card and your iPhone will automatically capture all the necessary info. Apple says that when a card is added to Passbook, the numbers are never stored on the phone or on Apple’s servers.
The three digit security code is replaced by a code that’s dynamically generated with every transaction.
Apple Pay: Where can I spent my hard-earned cash?
At launch, you’ll only be able to use Apple Pay in the US. Spendthrifty Brits won’t be able to go on sprees the day the iPhone 6s goes on sale.
Merchants who have lined up to get into bed with Apple Pay so far include McDonalds, Walgreens, Whole Foods Market, Groupon, OpenTable, Subway, Starbucks, Target, Instacart, Toys R Us, Babies R Us, Staples, Petco, Sephora, Panera Bread, Nike and Macy’s and – naturally – Apple.
We would expect the US brands that have a UK presence would work with Apple Pay once it rolls out over here. For the time being, there’s no UK release date for Apple Pay.
Apple Pay: How secure is it?
In terms of security, you’ll need to confirm any payments made with your phone using Touch ID. The idea behind this is that if your phone gets stolen, you can use Find My iPhone to suspect all payments coming from that phone – you won’t have to cancel any cards.
When you add a card to Passbook, its number isn’t stored or shared on your device or Apple servers. Apple Pay just processes the transaction, Apple won’t know what you’re buying and cashiers won’t be able to learn your name or identify you from your phone.