Apple Pay

Apple Pay is a contactless mobile financial transactions service developed for Apple devices. The service was designed to replace the need for a physical wallet and to allow mobile devices to become more universal. Apple Pay is compatible with any iPhone newer than the iPhone 6, Apple Watches, Macs with Touch IDApple iPad ProiPad Air 2 and the iPad mini 3 or newer.

Most major credit and debit card providers, such as Visa, MasterCard and American Express, are supported by Apple Pay. Additionally, banks and merchants worldwide, in over 40 countries, have accepted Apple Pay as a payment option.

Apply Pay can be used in any retail location that accepts contactless payments, which is usually annotated by an Apple symbol near card readers at checkout. Numerous shopping, entertainment and service apps and websites have also begun to list Apple Pay as a payment method through an API at checkout.

More recently, Apple introduced the Apple Cash feature of this service that lets users send peer-to-peer (P2P) payments using any device with iMessage. This is similar to the app Venmo and gives users the power to request money from or send money to contacts.

How to setup Apple Pay

Before setting up Apple Pay, users must have the Apple Wallet app installed on their device. Apple Wallet securely stores debit and credit card information that can be retrieved with Apple Pay. New payment methods can be added to Apple Wallet by opening the app, taking a photo of the card and filling in any necessary additional data.

The bank or credit card provider will then verify the information. This may involve authenticating the user’s identification through a passcode or phone call. But once at least one card is approved, Apple Pay can be used.

How does Apple Pay work?

Devices that are compatible with Apple Pay have integrated near-field communication (NFC) chips that initiate the service when the device comes in contact with a contactless card reader. When near a point-of-sale (POS) system, the device will light up and open the Apple Wallet automatically. The user can then choose which stored payment method they would like to use for the purchase.

Then, the user is prompted to authorize the purchase with either a passcode, fingerprint identification or facial recognition. With the Apple Watch, authorization is done with touch recognition on the wrist. A completed transaction is denoted by a check mark on the screen, device vibration and POS terminal beep. Receipts are then recorded in the Wallet app.

Benefits of Apple Pay

Using Apple Pay instead of more traditional payment methods can have the following benefits:

  • Transactions are kept secure with tokenization and either fingerprint or facial recognition.
  • There are no purchase amount limits.
  • Is compatible with any type of federal-payment cards, such as Social Security benefits.
  • Removes the need to enter a PIN into a card reader.
  • The app automatically opens when in range of a card reader, without the need to navigate to it.
  • Allows users to make purchases even when they have lost or forgotten their wallet.
  • Works with any merchants that accept contactless payment methods.

Concerns about Apple Pay

One concern with Apple Pay is that in some situations, it is not easier or more convenient than swiping a card. Using Apple Pay still requires multiple steps that may take the same amount of time as using a card reader. Additionally, even though users are notified that the transaction was successful, the Apple Pay system does not instantly transfer funds.

Another concern is what happens with payment information when a device is stolen or lost. However, since Apple Pay transactions must be authorized with a fingerprint, face or passcode, device owners should only be worried if the theft knows the passcode. Also, the only information that is available to view through the service is the billing address and the last four digits of any stored cards. The Find my iPhone service can also be used from another iOS device to enable Lost Mode that shuts down any Apple Pay transactions.

This was last updated in June 2019

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