Apple Pay

Last year at Apple’s iPhone 6 event, Apple Pay was introduced to the public. This new form of payment would allow a user to pay with his/her iPhone 6 at any store that had a compatible reader. The reason Apple made this move is because current credit cards are neither secure enough nor easy to retrieve in a moment’s notice. Google attempted a solution a year or so prior, but it failed when coming to mass adoption. So how would Apple change the game? How would their service be deployed? Is this the best solution?

*So everyone is aware, I have had an opportunity to use the service at my local Farm Fresh and it functioned just as I would expect. Not all stores are supporting Apple Pay yet. I know I’ve wanted to use it at places such as Target, Wal-Mart, Costco, and a few other retailers, but I’m just going to have to wait and be patient. Whether it be due to the lack of the proper technology or other reasons, it is still a new technology so it will take some time to grow and develop.

Starting with the iPhone 6, Apple began adding NFC (Near Field Communications) antenna to their phones. With this, a user could go to a store with a compatible reader, and pay by using their iPhone to complete the transaction. Major chains and retailers quickly adopted this new technology because of the security, and the ease of the service, Macy’s, Bloomingdales, Subway, Petco, Staples, Disney, Apple (of course), and McDonalds being some of the first. You could pay for everything online as well with one touch checkout. In addition to this, users will also be able to unlock their hotel room thanks to the capabilities of the NFC antenna.

How secure is it though? With Apple Pay, you can add your credit card to Wallet (formally known as Passbook) by adding one that is on file with Apple, or taking a picture of one and entering in the expiration date as well as the security code. Your device then gets a special device account number so your device never stores your credit card information. The data is then encrypted and locked away into a sub chip called the secure element. This would prevent data from being remotely accessed as previously done with the magnetic strip on a standard credit card. Whenever you make a purchase, your device will use a one-time purchase code which means that your transaction with the merchant remains anonymous. Apple doesn’t even have any information about your purchase! What if you lose your phone? Apple took that into consideration, and now, if you misplace your phone, you can halt purchases from the phone by going to iCloud and then Find My iPhone.  Because your actual credit card is not stored on the device, there is no need to cancel any of you cards!

If it’s so great, why has it not been heavily adopted? Chains such as Target, Wal-Mart, CVS, and a few other stores are a part of the Merchant Customer Exchange who are working to bring their own payment system to the market; this system is called CurrentC. The reason many businesses are flocking to this is because it would minimize the cost of transaction fees between them and the banks. Curiously, CurrentC has not yet taken off after two years. Within beta stage, the service got hacked and user names and passwords were exploited. Best Buy, Rite Aid, and a few others have left CurrentC, and promised to bring Apple Pay to their customers. With the slow progress of this system, we are bound to see more and more chains hop on the band wagon and support Apple Pay.

A few months ago, Samsung introduced Samsung Pay (I wonder where they got that idea from), and enabled it onto their flagship phones. Unlike Apple though, theirs could be used anywhere a magnetic card reader is used, thus, virtually anywhere. Google took another crack at it and brought back Google Pay. Mobile payments, as we know them, are shaping the future in shopping and payments.

I want to conclude by asking, is this new revolution good? Are there any security risks? Is it worth switching to a mobile based system? I’d love to hear your thoughts!

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