Apple Pay is a mobile payments service and digital wallet app that utilizes Near Field Communication (NFC) to initiate secure payment transactions between contactless payment terminals and Apple iOS devices like the iPhone 6, iPhone 6 Plus and Apple Watch.
Apple announced Apple Pay on September 12th along with the iPhone 6 and Apple Watch, but the service wouldn’t be available for actual use by customers until later in October. Upon its release, Apple Pay is expected to work with most major credit cards, including Visa, Mastercard and American Express, and will be accepted at more than 220,000 locations.
How to Use Apple Pay
Owners of Apple devices that support Apple Pay can use the service by first adding one or more credit or debit cards to their device. The device can use its iSight camera to capture the card’s information and add it to the Passbook app, or the card information can be entered manually.
Apple Pay can then be used by holding the device near a contactless POS (point of sale) transaction processor while placing the user’s finger on the Touch ID, which prevents unauthorized use of the iPhone by others to purchase goods or services.
Security and Privacy Features in Apple Pay
Apple Pay utilizes a number of security technologies to ensure the security of it transactions. Instead of the credit or debit card number being transmitted or stored on any remote servers, a unique Device Account Number is assigned, encrypted and securely stored in a dedicated chip in the device known as a Secure Element.
This Device Account Number is transmitted along with a transaction-specific dynamic security code when processing a payment, so the actual card information is never transmitted to the merchant or card processing service.
Apple Pay ensures privacy as well by only storing recent purchase information in Passbook. The actual details of transactions are not stored on Apple servers, in the cloud or anywhere else, according to Apple.