Should You Be Banking On Apple Pay?
By George Rosenthal
Apple Pay is here. This is the company’s big attempt to turn your iPhone into a wallet. It is also Apple’s attempt to grab a portion of the $4 trillion payments industry.
How does it work? First you will need an iPhone 6 or iPhone 6 Plus. These phones have special “NGC” chips which are needed to pass details of payments to the retailer.
Once you acquire the phone then you will need a software update. This involves downloading iOS8. Then you can start entering your credit cards into the phone. You can use your card on file with iTunes for the first one and then use the phone’s camera to add more cards by photographing the card numbers.
Most credit cards should work. This includes American Express, MasterCard and Visa and others from major banks. Retail branded type cards are not part of the system as of now.
Since Apple Pay just launched, the number of stores and restaurants accepting these payments are limited, though the company said its credit card can be used at over 200,000 stores and restaurants across the nation.
These include establishments like Macy’s, Walgreens and Whole Foods as well as gas and convenience stores. Though not all listed may be accepting the new system as of now.
Those on-board will have an icon at the checkout counter. It looks like a Wi-Fi symbol tilted sideways and a hand attached.
The beauty of the technology is that when you are ready to pay there is no need to unlock your phone. Place the phone near the credit-card terminal. Then touch your thumb to the Touch ID fingerprint scanner. The phone does the rest.
There is no credit card to swipe, no app to load, no button to click. Your thumbprint is all that is needed for the confirmation. When you feel a vibration or hear a beep you’ll know it has gone through. The screen will indicate so with a “Done” response.
Of course you will need to register your thumb on the phone. If you grant access to others, like your kids, they will need to register their thumbs as well.
If you have an iPhone 5, 5C or 5S, don’t worry. These models will be able to use Apple Pay with the soon to be released Apple Watch which shares the NGC technology.
Just how safe is this? The indication is that it is more secure than carrying an old-fashioned credit card.
In theory, it should take away our reliance on credit card numbers, which are relatively easy to steal. Your phone won’t be carrying your credit card number. Instead it will have a unique number that serves as a proxy for your credit card. It is stored on a part of the phone that doesn’t get backed up online.
As payments are made, the special NGC wireless chip sends over a one-time payment code, not your card number. Should the merchant’s system get hacked, a perpetrator shouldn’t be able to use the store’s data to steal your data.
What happens if you lose your phone? There’s no need to cut-up and re-issue all your credit cards. You can suspend payments via Apple’s Find My Phone app or website. Unless a thief steals your thumbprint, they shouldn’t be able to make purchases with your phone.
So, should you run out, grab an iPhone 6 and start using Apple Pay? Perhaps not yet. Since the technology is in its infancy, and not universally accepted, you will still need plenty of credit cards and cash during the shopping experience.
Other than those who are early adapters, most consumers might be well advised to take a wait and see approach as Apple determines how to enlist more merchants and bring the service more fully to the masses.