Apple Pay: What is it, who will accept it and what impact will it have?

What is Apple pay?

Apple Pay: What is it, who will accept it and what impact will it have?

Apple Pay is a mobile payment system that acts as a digital wallet. It allows a user to make payments using compatible Apple devices. Apple Pay does not require Apple-specific contactless payment terminals.  Currently, Apple Pay is only available for use in the US in its initial stages, but international roll-out is ongoing.

Which devices will be compatible?

  • iPhone 6
  • iPhone 6 Plus
  • Apple Watch-compatible devices (iPhone 5 and later models, although this lacks Touch ID security)
  • iPad Air 2
  • iPad Mini 3

How does Apple pay work?

The service lets Apple devices wirelessly communicate with point of sale systems using a near field communication (NFC) antenna, a “dedicated chip that stores encrypted payment information”.  In other words, it allows for an Apple mobile device to pay for goods and replaces a credit or debit card’s magnetic strip for a transaction. 

To use Apple Pay on a device such as an iPhone 6, the user authenticates the device to the point of sale.  They do this by putting their fingerprint on the phone’s Touch ID sensor and double clicking. Users can add credit cards to the service via iTunes accounts, adding a photo of the card, or by manually inputting card information.

Who will be allowing use of Apple Pay when it launches?

In the initial launch, there will be 220,000 participating vendors, including Macy’s and Bloomingdales, Subway and McDonald’s, and other retailers including Boots, Lidl, Costa and Nandos. 

Groupon and Uber are already compatible with Apple Pay in the US. Leading UK brands are following suit, with Dominos, British Airways, Argos, Last Minute.com and Zara set to update their apps.

What impact will Apple Pay have?

Apple Pay will have a major effect on the payments market. V3 talked to TechUK’s Payments, panel experts at the Innovation Conference, in this article.

Mark Curran, the Payments and Technical Services Director at Lloyds said “Apple Pay brings something new to the market, no question. It will have a significant impact, and you don’t do anything with Apple in a guarded way ………….You just have to look at their reach, at the type of customers they’ve got, the number of customers. And the service is pretty good, so I think it will take off.”

Tim Jones, Chief Executive of National Employment Savings Trust (NEST) said Apple’s and other similar payment services are an indication of the market moving towards entire wallets being digitised, stored in the cloud and on smartphones: “Apple Pay and Android Pay, and the concepts inside them, are significant contributors because they allow all the payment cards we have in our gazillions to be placed in our smartphones. And therefore it is part of an inevitable and necessary process.”

It’s clear that Apple Pay will transform the way people pay for goods and services all over the world. Purple WiFi think that anything which gives consumers greater choice of how they want to shop is a positive thing, and will ultimately help to facilitate the shift towards the Internet of Things.

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