A look at Apple’s revolutionary payment method
There has been previous attempts at transferring our wallet from the jeans pocket to electronic devices over the last 25 years. Firstly, the debit card, which has replaced cheque books for everyday purchases, is the most successful to date. Then came prepaid cards, used in the Visa Cash system and many a gift card. The marriage between debit and credit cards with online shopping brought us electronic money transfer systems like PayPal and Worldpay. Among its offspring is contactless systems like Apple Pay.
A brief history of Apple Pay
On the High Street, virtual or bricks and mortar, there has been some rivalry between Google’s Android and Apple’s iOS devices. Though Apple was the pioneer with its revolutionary smartphones and digital tablets, devices powered by Google’s Android OS has become a more popular option with cost-conscious households. With the popularity of the iPhone, Apple CEO Tim Cook thought the magnetic strip on the reverse of credit and debit cards was insecure.
With this in mind, Apple Pay aimed to right that wrong with a two-factor authentication system. Its aim, to win the trust of online and High Street customers. Central to this was another iOS device – this time the Apple Watch – and the use of Near Field Communication technologies. The latter, placed near the retailer’s EPOS systems, allows for contactless payment via his or her iPhone and their Apple Watch.
Launched on the 20 October 2014 in the US, Apple Pay’s UK launch came on the 14 July 2015. At present, payments in the UK are capped to a maximum of £20, as EPOS system software has yet to be upgraded. Google’s equivalent to Apple Pay is Android Pay, which uses similar technology. It was launched on the 11 September 2015.
Getting to Grips
1. How to set up Apple Pay
Before you start out with Apple Pay, you will need the following:
- An iPhone (6 and 6s models);
- An iPad;
- An Apple Watch;
- The Wallet app, on any of the above devices;
- An iTunes account;
- Any credit and/or debit cards.
As well as offering swift and secure payment options, the Apple Pay system is great if you have bought into the ecosystem of Apple’s Holy Trinity of Portable Devices. If you feel the urge for a Steak Bake or a Big Mac in the centre of Bolton for example, you need the Apple Watch or your iPhone to make payments. If you are shopping online, you need to use any retailer’s app which supports Apple Pay. This is possible from your iPhone or iPad.
Before you begin, download and open the Wallet app on to any of your Apple iOS devices. Then, add your credit or debit cards to your iTunes account by entering the security code. This is the last three digits seen on the magnetic strip of your card.
Adding Credit and Debit Cards
- iPhone: adding cards can be done by clicking the circled ‘+’ symbol and following the on-screen prompts.
- iPad: go into Settings then select Wallet & Apple Pay and Add Credit or Debit Card.
- Apple Watch: on your iPhone, select the Watch app on your device then go to Wallet & Apple Pay and Add Credit or Debit Card.
Before you make your first payment on Apple Pay, no payment can be made without a Touch ID or Passcode and an Apple Watch. Credit or debit card details are never shared by Apple with merchants nor transmitted with each payment.
2. How to make payments with Apple Pay
When you start out with Apple Pay, one thing you will notice is its authentication methods. In the United Kingdom, a credit or debit card has a single layer of authentication (represented by a PIN number). With Apple Pay, there is two layers: one is your unique Device Account Number, which is stored in the Secure Element chip of your iOS powered device. Another one is a Transaction-Specific Dynamic Security Code. This is created during each transaction.
Purchases can either be made through Apple’s Wallet app or an Apple Pay compatible retailer’s app. The Wallet app stores boarding passes, debit cards and credit cards. These are saved within your iTunes account. As a result, no card details are saved on any iOS devices. Payment is made via contactless methods using Near Field Communication.
- iPhone: use your Touch ID to begin the process and hover your device over the contactless reader. Place fingerprint on Touch ID or double click the ‘Home’ button;
- Apple Watch: double click the side button of your watch and hold the display up to the contactless reader. A tap and a beep will confirm a sent payment.
If your iPhone, iPad or Apple Watch is AWOL or sold onto a new owner you could deprive the next user of a spending spree at your expense. Lost Mode performs two functions: 1) it enables you to suspend Apple Pay; or 2) wipe your device clean – important if passing your iOS device to another person. Activating Lost Mode is done by going into Find My iPhone whilst you log in to your iCloud account. Shortly, it will display the exact position of your iPhone or iPad – a far cry from these whistle activated keyrings big in the late 1980s.
3. Who supports Apple Pay?
Since its UK launch this Summer, Apple Pay has been supported by a number of national and international chain stores. The bulk of which seem to be sandwich shops and takeaways, given that a typical spend would be below the £20 maximum for Apple Pay transactions. Through Apple Pay’s Wallet app, it is possible to:
- Enjoy a Greggs Steak Bake or a McDonalds extra value meal;
- Pay for a meal deal or get some milk from Boots, Marks and Spencer, Spar, Lidl, Waitrose or Wilko;
- Treat yourself to a Nando’s or KFC chicken based meal – or go posh at Five Guys;
- Buy a greetings card or pay for some stationery at the Post Office;
- Have a coffee at Costa or Starbucks Coffee;
- Fill up at Pret a Manger, Subway, The Cooperative or your nearest BP garage;
- Nip to Screwfix for a set of screwdrivers;
- Call in to Apple Store for a new peripheral.
As well as Apple’s Wallet, a number of retailers – including the Apple Store – also have proprietary apps. These include:
- Miss Selfridge;
- Topshop and Topman stores;
- JD Sports;
- Five Guys.
Not only shops; Apple Pay is also supported by apps from the following websites:
- Hungry House;
- Just Eat;
At present, Apple Pay could be a suitable option for small purchases. A trip to your local minimarket for a pint of milk and something for tea means no fumbling for change. The use of mobile technology on public transport could interplay with Apple’s payment system; it is already in use with Transport for London’s Oyster Card. Around five years from now, probably the Northern English equivalent and on Transport for Greater Manchester’s GetMeThere Oyster style cards.
We think younger tech-savvy cash-rich types are among Apple Pay’s early adopters. If Google’s equivalent gains popularity, this is where Near Field Communication based payment systems will become the norm. The queues at Greggs will be shorter, with iPhones or Android devices replacing the jingle of loose change. It’s probably not long off as we speak.
- Apple.com/apple-pay: Secure, Simple and Even More Useful: Apple Pay section of Apple’s website;
- Developer.apple.com: Wallet – The home for Apple Pay and More: details on the Wallet app.
Independent Merchant Services, 10 December 2015.