Simple To Use
Apple Pay offers one of the simplest transaction experiences of all smartphone mobile wallets currently on the market. The process is as follows: customers simply hold the phone against an NFC-compatible terminal, place one finger on the iPhone’s home button when prompted, and wait for the transaction to finish. The entire process only takes a few seconds and doesn’t require the user to unlock the phone, select a card, enter a PIN, or type in card information. Apple Pay does not charge a fee for debit transactions though a rate of 3% applies to purchases made with credit cards.
Touch ID Feature
This ease-of-use is made possible by the iPhone’s Touch ID feature, which verifies the user’s identity using a preauthorized fingerprint. In theory, this makes it impossible for Apple Pay to process a payment unless the phone’s approved user is holding the device. As a result, the user can set a default card for all transactions and trust their iPhone to automatically interact with any NFC-enabled payment terminal, since no payments will occur without the user’s fingerprint.
Secure Apple Watch Use
Apple Watch users can utilize Apple Pay by double-tapping the watch’s side button and holding the watch up to a contactless terminal until the transaction is complete. Upon initial setup, Apple Watch owners will be prompted to set a PIN in order to access the Apple Pay app. Then, each time the watch is removed from the user’s wrist and then put back on, the user will need to enter this PIN in order to use Apple Pay. This helps to prevent unauthorized use of the app while also limiting the number of times a user has to enter his or her PIN.
Apple Pay is also compatible with nearly all major card issuers, including American Express, Bank of America, Capital One, Chase, Wells Fargo, Citibank, Barclaycard, Navy Federal Credit Union, PNC, USAA, and US Bank. Many regional banks and credit unions are also supported (full list here), but not every card-issuing bank is compatible with Apple Pay at this time.
Loyalty Card Integration
The only major feature that Apple Pay lacked at the time of our last update was the ability to store and track loyalty cards. Apple Pay loyalty card support now exists for a number of retailers, including JCPenny, Walgreens, and various restaurants. Apple Wallet allows users to store their loyalty cards in their phones, and Apple Pay can now automatically apply discounts linked to these cards for several, but not all, merchants.
Solid Security Measures
In terms of security, Apple Pay requires the fingerprint of an authorized user or a PIN in order to process a payment, making it impossible for a thief to commit fraud unless he or she can somehow deceive the fingerprint scanner or guess the user’s PIN. In addition to the identification required for each in-store transaction, Apple Pay will allow users to remotely deactivate their Apple Pay accounts in the event of theft. This is a secondary countermeasure against unauthorized users making one-touch in-app or online purchases with Apple Pay.
If a thief obtains access to the user’s phone, the user’s credit card details will not be compromised because Apple does not store the card data itself on the device. Instead, Apple Pay tokenizes each card’s data, replacing it with a chain of letters and numbers that is itself meaningless but can be decoded by Apple and the card networks. So if the actual token itself is somehow intercepted, it will be worthless to the fraudster who has obtained it.
Apple stated that it will not save or share users’ transaction information, although this claim is nearly impossible to verify.