Apple Announces Mobile Payments System
September 10, 2014
September 10, 2014
Apple Tuesday announced Apple Pay, a new mobile payments system that will launch in October. Using Apple’s new iPhone 6 and 6 Plus, which launch September 19, Apple Pay will allow customers to pay for purchases at participating retailers using only their phones.
Apple CEO Tim Cook said that the current credit and debit card system is outdated. “We’re totally reliant on the exposed numbers, and the outdated and vulnerable magnetic interface, which, by the way, is five decades old,” said Cook, “and the security codes which all of us know aren’t so secure.”
Apple Pay allows customers to link their credit and debit cards with their iPhones by simply snapping a photo of their cards. Then, when they are at a participating retailer — a list that currently includes Macy’s, Whole Foods, Petco, McDonalds, and others — they can pay for purchases by holding their phones up to a special receiver.
At launch, only cards from several big banks and payment providers will be supported — American Express, Bank of America, Capital One, Chase, Citi, and Wells Fargo. More financial institutions will be added shortly thereafter, including Navy Federal Credit Union.
“Our members live fast-paced and mobile lives,” said Navy Federal Vice President Randy Hopper. “And, they have enthusiastically adopted our mobile banking solutions. Now, with Apple Pay, they’ll be able to save time when shopping while having a safe and easy experience.”
It’s not yet known what deal Apple has made with payment providers, whether it will make money off of Apple Pay transactions.
Apple Pay will include a number of advanced security measures. Apple says that customers’ credit card information will not be stored on iPhones or on the company’s servers. And when making purchases with their iPhones, customers will first have to authenticate their identities using the phone’s built in fingerprint scanner.
If a phone is lost or stolen, there will be no need to cancel credit cards, said Apple, because card information is not stored on the phone. And all payments using that phone can be stopped by using Apple’s Find My iPhone software.
Apple Pay will rely on near-field communication (NFC) technology, which will be included in the new iPhones. The Apple Watch, also announced Tuesday and slated to launch early next year, will also include NFC technology and allow customers to use Apple Pay in stores.
Apple Pay will also be used for online and in-app payments, starting with apps like Uber and Groupon. The system will allow one-click, secure purchases within third-party apps.
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