IT’S NOT AVAILABLE in Ireland yet, but Apple’s new NFC (near-field communication) pay system launched yesterday evening in the US.
So far, the reception has been overwhelmingly positive.
Aside from major retailers including McDonalds and Subway, there were some surprise bonuses yesterday, with reports that Apple Pay was working in New York and Boston taxis.
One journalist (with a US-based credit card) even reported that the app was triggered accidentally in a taxi in the UK.
Despite that, the service isn’t available yet for European consumers, but in a statement last month, Visa’s Chief Digital Officer Steve Perry said they were “were working closely with Apple and with our member banks to bring this new service to market in Europe.”
For now though, here’s a guide to how Apple Pay works:
What do you need to use Apple Pay?
To fully use it, you’ll need an iPhone 6 or iPhone 6 Plus with iOS 8.1, a free software update also released yesterday.
You’ll also get some online-only features with the iPad Air 2 and iPad Mini 3 coming out later this week. Older devices won’t work, even with the 8.1 update.
You’ll also need a credit card that works with Apple Pay.
Major American credit card issuers such as American Express, Bank of America, Capital One, Chase, Citibank and Wells Fargo are backing Apple Pay.
Which shops are accepting Apple Pay?
Loads of them. Most retailers that already accept contactless payments should be able to use Apple Pay, as well as Google Wallet, Softcard and other services that are based on NFC.
A few dozen chains, including Macy’s, McDonald’s, Subway and Whole Foods, have accepted Apple Pay right away, though some of their branches might not be ready yet.
In addition, you can use Apple Pay to make online purchases within apps, without having to enter card numbers, billing addresses and other information.
It’s up to merchants to enable this with app updates. For example, Groupon, OpenTable, Staples and Target are among the initial ones to do so.
Is it safe?
Although security measures are never foolproof, the Apple Pay system is safer than many current pay methods.
For one thing, a substitute account number is assigned when you set up Apple Pay.
Merchants get that instead of your real card number. In addition, a verification code is created for each transaction, based in part on unique keys on the phone.
So even if hackers get that substitute number, they wouldn’t be able to generate the verification code without having possession of your phone, so fraudulent transactions would be declined.
What about smaller shops?
Dry cleaners, local restaurants and other smaller businesses are less likely to have the equipment ready.
All told, there are more than 200,000 payment terminals in America capable of making “contactless” transactions, but that’s out of several million.
Starting late next year, merchants will be liable for fraudulent transactions if they don’t have equipment with an enhanced security system called EMV.
Because merchants have to upgrade equipment to EMV anyway, they can get the NFC capability for not much more.
Does it cost money to use it?
Apple hasn’t said much about how it plans to make money from Apple Pay transactions, but it’s safe to say that credit card companies would be the ones covering any fees.
Card companies might factor in those costs in the normal fees that consumers and merchants pay.
How is Apple Pay different from other contactless systems?
The most noticeable difference is the use of the fingerprint ID sensor to authorize transactions.
If you think about it, it’s quite easy to pull out a plastic credit card to pay for something, so any mobile-payment system has to be just as easy.
That can’t be said when you have to spend time typing in your PIN at the till, though. The fingerprint ID lets you bypass that with one touch.
Contains reporting from the Associated Press.
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