Apple Pay: Where To Use It - InformationWeek

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10/20/2014
10:31 AM
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Apple Pay: Where To Use It

Apple launches mobile payment service. Here's what you need to know.

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If you own an iPhone 6 or iPhone 6 Plus, you'll be able to use your smartphone to make payments at select retailers beginning Monday. The capability arrives with iOS 8.1, which should become available from Apple by midday.

Apple may be late to the mobile payments game, but it has the potential to serve as a catalyst for the industry. Apple Pay may turn the tide for smartphone-based payments. Here's how it works:

Apple Pay is limited to just four devices at launch: the iPhone 6 and iPhone 6 Plus, and the iPad Air 2 and iPad Mini 3. Why these four? Because they include Touch ID fingerprint sensors. iPhone and iPad owners can use a fingerprint to make payments. Further, the two iPhones are the only devices that will be able to make payments at retailers because they include the necessary NFC radio inside. The new iPad's don't have NFC radios, but they can still use Apple Pay for in-app and online purchases. (The Apple Watch will also support Apple Pay, but the watch doesn't go on sale until next year.) iOS 8.1 is mandatory. It turns on the service and resolves a number of ongoing bugs with Apple's latest mobile operating system. The update will likely arrive around 1 p.m. Eastern Time.

With the new operating system and proper hardware in hand, users will need to assign a credit card to Apple Pay. Users can select the card already associated with their iTunes account and add it (and others) to the Passport application on their device. At launch, MasterCard, Visa, and American Express are supporting Apple Pay, along with dozens of banks, including American Express, Bank of America, Capital One Bank, Chase, Citi, and Wells Fargo. Apple said as many as 500 banks will support Apple Pay by early next year.

[For more on mobile tech trends, see This Week In 60 Seconds: Google Phones, Mobile Trading, & More.]

Worried about your financial and personal details? Relax, says Apple. "[Apple] doesn't collect any transaction information that can be tied back to a user, and payment transactions are between the user, the merchant, and the user's bank," the company explained in a statement. Apple doesn't store users' purchase histories, which means it retains nothing about the store, location, price, or goods involved in the transactions.

Further, the iPhone 6 and iPhone 6 Plus don't store credit card numbers locally. Instead, Apple creates a unique Device Account Number that is encrypted and stored on the Secure Element of the smartphone. Apple says these two components are walled off from iOS and never backed up to iCloud. Each and every transaction is given its own unique code.

"Our team has worked incredibly hard to make Apple Pay private and secure, with the simplicity of a single touch of your finger," said Eddy Cue, Apple's senior VP of Internet Software and Services, in a press release.

Where can you use Apple Pay? All 262 Apple Stores in the US will support Apple Pay beginning today. A significant number of other retailers are also supporting Apple Pay at launch, including Aéropostale, American Eagle Outfitters, Babies 'R Us, BJ's Wholesale Club, Bloomingdale's, Champs Sports, Chevron and Texaco retail stores, Disney Store, Duane Reade, Footaction, Foot Locker brands, Macy's, McDonald's, Nike, Office Depot, Panera Bread, Petco, RadioShack, SIX:02, Sports Authority, Subway, Toys'R'Us, Walgreens, Wegmans, and Whole Foods Market. Apple says more retailers will add support over the coming months. Apple claims Apple Pay will be available at 220,000 locations, but it's not clear how many of those locations will go live on launch day.

In addition to retail stores, a number of apps will support Apple Pay beginning today, such as the Apple Store app, Groupon, HotelTonight, Lyft, OpenTable, Target, and Uber. Apple says many more will support Apple Pay for in-app payments by the end of the year, including Airbnb, Starbucks, and Ticketmaster.

Whether or not Apple Pay will revolutionize on the mobile payments industry is debatable. Either way, it should deliver a good kick in the pants.

More information on Apple Pay is available here. Do you plan to give Apple Pay a shot? Let us know in the comments section.

The Internet of Things demands reliable connectivity, but standards remain up in the air. Here's how to kick your IoT strategy into high gear. Get the new IoT Goes Mobile issue of InformationWeek Tech Digest today. (Free registration required.)

Eric is a freelance writer for InformationWeek specializing in mobile technologies. View Full Bio

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shakeeb
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shakeeb,
User Rank: Ninja
10/31/2014 | 12:16:24 PM
Re: cash is king
@jagibbons – I too prefer cash but it's always good to move along with technology. Credit cards have been in existence for quite a while, it's high time for use to move into a new payment platform. 
progman2000
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progman2000,
User Rank: Ninja
10/31/2014 | 12:16:17 PM
Re: cash is king
What are cash payments?
shakeeb
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shakeeb,
User Rank: Ninja
10/31/2014 | 12:08:10 PM
Re: cash is king
@ PedroGonzales – I am wondering what apple is hoping to do by tracking user's payment information. Do you think users already know this?
shakeeb
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shakeeb,
User Rank: Ninja
10/31/2014 | 12:06:29 PM
Re: cash is king
@progman – Do you think apple will succeed in their payment system? There are many ongoing payment project but most of them don't seem to be successful.
shakeeb
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shakeeb,
User Rank: Ninja
10/31/2014 | 11:51:53 AM
Re: cash is king
@Thomas- Do you prefer cash payments just because it's widely accepted and convenient? 
jgherbert
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jgherbert,
User Rank: Ninja
10/29/2014 | 11:18:31 AM
Re: cash is king
@jagibbons> "What I'm not sure about with Apple Pay is whether or not the payment data in transit will be as subject to skimming as most current POS terminals"

 


As I understand it, part of the point of the use of tokenization is that you are using a different unique "card number" each time you make a transaction, therefore in theory at least, even if somebody is able to skim your card number, it's worthless data as it's not re-usable. Maybe somebody with security expertise can comment on whether that sounds correct.
jgherbert
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jgherbert,
User Rank: Ninja
10/29/2014 | 11:15:16 AM
Re: cash is king
@progman2000> [Citation Needed]

 

I'm not entirely clear from what I've read, how much visibility Apple actually has into each transaction or if they are simply routing encrypted traffic to the providers with whom they are partnered. Does anybody know?
progman2000
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progman2000,
User Rank: Ninja
10/21/2014 | 9:03:28 AM
Re: cash is king
Agreed that it is awfully fishy to say that they are not tracking your expenditures.  That is a huge mountain of valuable data that they would have access to, and surely would need to keep it for audit purposes.  I think they are probably using a Clinton-esque definition of what "tracking expenditures" probably means....
jagibbons
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jagibbons,
User Rank: Ninja
10/20/2014 | 9:21:54 PM
Re: cash is king
Cash is still king, but the king is on the way to being dethroned. I hardly ever carry cash. I'm also not an iPhone user, so I'll have to stick with my credit cards for payments. What I'm not sure about with Apple Pay is whether or not the payment data in transit will be as subject to skimming as most current POS terminals. That's a terminal, software and network issue, not a device issue (phone or credit card).
PedroGonzales
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PedroGonzales,
User Rank: Ninja
10/20/2014 | 9:16:40 PM
Re: cash is king
Unfortunatelly, I don't have Iphone 6. I will stick with cash for now.  I'm sure that a lot of people will jump on the apple pay bandwagon. I don't know if its credible to say that apple doesn't track your expendures using apple pay.  They may change their tracking policy, who knows?   
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