“Payments are broken” CEO Tim Cook said on stage during its September 2014 keynote where Apple revealed its new payment system called Apple Pay which will “revolutionize” the way we make payments as the current method is “fairly antiquated” and not so secure. Apple Pay will replace the credit card with NFC, Touch ID, Passbook and Secure Element (more on that later).
Apple Pay can be used to make purchases from within apps without having to fill in any additional credit card information (you simple press with Apple pay and confirm your ID with Touch ID) or at retails stores using the iPhone 6, iPhone 6 Plus or Apple Watch (which can be connected to iPhone 5, iPhone 5c, and iPhone 5s)
How Apple Pay Works and why it will revolutionize the way we pay
Apple Pay is all about making payments simpler and more secure. There are 4 key elements that are used to make this payment system work, those are: Touch ID, NFC, PassBook and Secure Element. Lets take a more in-depth look at each one of them:
- NFC: Apple will use NFC technology in the iPhone 6, iPhone 6 Plus or Apple Watch a standard that has been used by Android smartphones for some time now to make payments. (more about NFC here)
- Touch ID: Is one of the elements that makes Apple Pay so safe and easy to use as it will use your fingerprint to verify your ID. Touch ID will replace what currently is our pin code making it faster and safer.
- PassBook: Passbook already stores your boarding passes, tickets, coupons, and more. Now it can store your credit and debit cards, too. All your payments and credit cards will be handled from one single app, Passbook.
- Secure Element: while the previously mentioned technologies and apps might sound familiar, Secure Element is new, your Device Account Number and credit card information is assigned, encrypted, and securely stored in the Secure Element, a dedicated chip in the iPhone.
Full list of Confirmed Retail Stores to Accept Apple Pay as payment method.
There will be 220,000 contactless payment points when the service launches where you can use Apple Pay as payment method, but there are several big retailers that will also accept Apple Pay, here is a list of the biggest and most interesting ones:
- Apple Store (obviously)
- Disney Store
- Target
- Starbucks
- Bloomingdales
- Nike
- McDonalds
- Staples
- Walgreens
- Toys R Us
- Subway
- Panera
- Duane reade
- Macy’s
- Babies R Us
- Walt Disney World
- Whole Foods
- Petco
- BP (in 2016)
- KFC (Is working on it but have no timetable for support.)
- Best Buy (Could add it in the near future with “as well as several other competing platforms”)
- Dunkin Donuts (unconfirmed, but probably in the next year or so)
Large Retailers that have confirmed they won’t accept Apple Pay
While there are a ton of big retailers that have, not everyone is so excited about Apple Pay. Several large retailers are not accepting Apple Pay mainly because of the cost of upgrading their technology. Here is a list of retailers that have confirmed they won’t accept Apple Pay and the reason why (source)
- Bath & Beyond (“unable to participate”)
- Belk (“we don’t have the capability to accept Apple Pay right now”)
- Sears
- Kmart
- Publix
- Pizza Hut (has “no immediate plans” to accept apple pay)
- Chipotle (“We have not signed on as of now.”)
- H&M (“No concrete plans to accept Apple Pay”)
While some are definitely looking into it, it is highly unlikely that in 2015 any of the retailers mentioned above will start adding support for Apple’s new payment method.
List of Banks to support Apple Pay
Apple has partnered up with several banks that will cover most credit cards in the US. Apple’s payment system currently supports credit and debit cards from American Express, Mastercard and Visa and more then 6 banks in the US (only 3 have been officially announced, of the other 3 it is yet unknown which ones they are)
- JP Morgan Chase
- Bank of America
- Citigroup
Apple is still talking to the following banks which still have some security issues to resolve:
- USAA
- Navy Federal Credit Union
- PNC
