Apple Aims to Revolutionise Payment Systems with ‘Apple Pay’

The technology company has unveiled its new payment system ‘Apple Pay’ along with the new iPhones. This new mobile payment system is trying to address the issues of credit and debit cards having exposed account numbers, outdated magstripes, and vulnerable security codes.

“We’ve placed a lot of energy into creating an entirely new payments solution.” – Tim Cook

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Apple Pay will allow users to make payments with their iPhone 6 by a making a single tap. It uses NFC to make the transactions happen, and is claiming to secure it with its own privacy mechanism ‘Touch ID’ In order to enable making payments one has to add a card from their iTunes account, or iSight Camera. Once the card is on file with Apple Pay, one can use the phone to check out at participating vendors — both brick and mortar and online — by authenticating with Touch ID.

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Apple says if any card is added to the Passbook, its number is never stored or shared on the device or Apple servers. Each transaction is authorized with a one-time unique number.It generates a dynamic security code, replacing the static security code from the back of your card.

Apple has partnered with Visa, Mastercard and American Express to make this happen.

If you lose your iPhone, you won’t have to cancel cards. Simply use Find My iPhone to suspend payments just for that device. – Apple

Currently the service go live in US, and will work with the top bank issuers that handle 83% of the credit card purchase volume.

There are more than 220,000 merchant locations that accept contactless payment. Including Disney Land!

It will be interesting to see how iPhones will now influence the eCommerce scenario in the West, considering Apple is emphasizing on its partnership with retailers to empower this system. Currently in the list are Sephora, Opentable, Starbucks, Disney, Uber, Staples etc. Apple Pay will be available in the U.S. in October 2014. And work is underway to take it worldwide in the near future, says the team.

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