Everything you need to know about Apple Pay

Last year, Tim Cook announced a revolutionary feature that would be included in all new iPhones. Since then, it has been enhanced several times with the launch of the Apple Watch and iOS9. This feature was promised to change the way you shop forever! With such bold promises, we would have expected Apple fans to jump all over this feature, however NFCWorld claims that only 200 million digital wallets are expected to exist in 2016. A small slice of the over 500 million iPhones sold thus far according to Forbes. Related: 5 Tips To Protect Your Mobile Credit Card Data

What is Apple Pay?

Apple Pay is a nifty little feature on your iPhone that lets consumers make purchases using nothing but the smartphone. It charges your existing credit or debit cards and adds points to your rewards card, all without having to fumble around with your handbag or wallet. It’s designed to be convenient and secure.

How does Apple Pay Work?

Apple Pay uses 2 relatively new technologies to create a secure environment to make a purchase. The first is NFC chips to pay over the air. This is the same technology your Visa payWave or Mastercard PayPass enabled cards have. This computer chip is designed to send transaction data to a receiver when it is placed a very short distance away.

Apple’s proprietary TouchID makes the other half of Apple Pay work, and is the reason why the feature is touted as being very secure. TouchID scans a finger that’s placed on the home button, and if it’s a match to whatever the fingerprint was when the “Passbook” was set up, payment is approved. Think of it as a PIN number attached to your fingers that you can’t forget!

Apple Passbook is the final piece in the puzzle. It’s an app that was created to store airline or movie tickets, points cards, and, most recently, credit cards. It’s insanely easy to add a card to your passbook – just snap a photo of it. Keep Reading: Is Mobile Banking Safe?

Is Apple Pay more Secure than my Credit Cards?

This is the million dollar question. Is your money safer in the hands of your iDevice or is it better to trust the gold ole plastic cards you’re comfortable with?

Phones can get lost or stolen, and with it all the information about your credit cards, all your transaction history, everything that makes you who you are as a consumer. This is a bad thing… right? Luckily Apple integrated TouchID into their devices. As long as you have this on, anyone wanting to snoop through your phone would need your finger. Anyone wanting to use your phone to make a payment needs that same finger. Unlike a PIN, it can’t be guessed or socially engineered. You physically have to be there.

The iPhone also obscures your card information from the merchant. It is not only your responsibility to keep data safe, but also the merchant. They receive their payment, but the rest of your information is not passed to them. Instead it’s obscured, very similar to what they do with developers when they receive payment on the App Store. This is a new layer of security that greatly surpasses the traditional methods. When news hit of Target’s data breach (or any other major department store), 70 million customer’s credit card and other personal data was stolen in 2013, if all of the clients were using Apple Pay, the only thing that would have been lost was useless transaction IDs and time stamps.

Are there Reasons why I Shouldn’t use the Feature?

Sadly, the biggest drawback to converting to shopping through your iDevice is adoption. Companies have been slow to update their Point of Sales machines, and it’s impossible to shop this way without a hardware update to support NFC transactions. It could be quite a few years before your neighborhood Mom and Pop Shop accepts purchases this way so, without a major shift, you'll still have to carry your wallet around. However, with an ever growing list of companies (and countries) that support Apple Pay, it becomes more and more likely that you'll be able to use the service.

In the end, Apple Pay will increase its influence on the economy; with every update to iOS Apple has been improving the feature. iOS9 brought Discover cards into the fold and rumors have been circulating that Australian banks will be approving it very soon. Google is also launching their pay-through-the-phone feature. It’s the future of paying, but it’s not everyone’s present. Keep Reading: 5 Tips To Increase The Security Of Mobile Apps

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