Apple Pay, Apple’s Take On Standardizing Mobile Payments
Apple is taking its first dive into mobile payments pool. The company announced its new service called “Apple Pay” during iPhone launch event held at Flint Center for the Performing Arts on Tuesday, Sept. 9. Apple Pay will be a mobile payment platform that will let users carry out mobile payments in a secure and easier way.
Apple Pay works by using Near-Field Communication (NFC) technology along with Touch ID. All you need to do is tap on your iPhone at a shop or payment processing portal, and it will read your fingerprints using Touch ID to authenticate you for payments. To support the system, they have added an application called Passbook which collects user’s credit cards, tickets and loyalty cards.
The biggest issue for such a system is privacy of the user and Apple has addressed this issue in a good way. The system creates one-time payment numbers for purchases instead of transmitting credit card numbers. This approach makes transactions totally anonymous even to Apple. Apple doesn’t store the credit card information on its servers, and neither does it give this information to the merchant. They will only see a transaction number and receive the money. Hence, the payments are made securely.
“Apple doesn’t know what you bought, where you bought it or how much you paid for it. The transaction is between you, the merchant and your bank,” said Eddy Cue, Apple’s senior vice president of Internet software and services. “The cashier doesn’t see your name, credit card number or security code.”
To add a card to Passbook, users can take a picture of the card using iPhone’s iSight camera and add it to Passbook. Apple will verify the card with the card provider and users don’t have to worry about all this process as it will be handled by Apple using the one-time-payment-number approach.
Google wanted to implement such a system with its NFC technology and Wallet app but it failed to gain the trust of merchants as well as users.
Apple, however, has persuaded 6 U.S. banks to support their Pay technology. According to TechCrunch, 22,000 merchant locations are supported that include McDonald’s, Subway, Macy’s, Bloomingdales, Walgreen’s, Duane Reade, Panera Bread, Whole Foods, Staples, The Disney Store, Target, Sephora, Apple Store, MLB, Instacart, OpenTable, and Groupon.
Uber and Starbucks have also added support for Apple Pay.
Apple has lined up many big names that will be supporting its Pay tech. It is wise to say that Apple has moved a step ahead of Google in utilizing NFC technology for mobile payments, which might enable them to standardize the mobile-payment platforms.
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