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September 10, 2014

Apple Pay brings mobile payments to the iPhone 6 and Apple Watch

Digital wallet uses fingerprint technology to ensure security.

By Vinod

Apple has announced the launch of Apple Pay, a new mobile payments service which lets users pay for goods using just the touch of their finger.

Using near-field communication (NFC) technology, users will be able to pay for purchases simply by holding their device over a compatible reader, doing away with the need for credit or debit cards.

The process uses the TouchID fingerprint reader built into Apple’s newest iPhone (as well as its predecessor, the iPhone 5S) to authenticate a user’s identity, as they will have to hold their finger over the sensor to complete the payment.

apple pay

Apple Pay will initially be available in 220,000 American stores, including the likes of McDonalds, Subway and Starbucks, with payment providers including Wells Fargo, American Express, Visa, Mastercard, Chase Bank, BoA, CapitalOne and Citi supporting the service at launch, with more (including Barclaycard) to follow.

"Apple Pay is the kind of innovative thinking that brings the worlds of online and offline commerce closer together," said Ken Chenault, CEO of American Express. "We’re excited to work with Apple to offer Card Members and merchants a simple and secure way to make purchases in stores and on apps."

Apple did not mention a UK launch for the service, however several existing services are already in place in shops across the country.
Users of the company’s upcoming iPhone 6 will be the first to benefit from Apple Pay, which comes as part of Apple’s new iOS 8 operating system, but the service will also be included on the Apple Watch, due to launch next year, although Apple did not go into detail as to how exactly it would work.

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Users can add a card associated with an iTunes account directly to Passbook, with Apple Pay also able to pay for in-app purchases, meaning users will no longer have to enter credit card or shipping details.

Apple says it does not store any card data, nor can it see purchase details, location or cost, with all information kept secure on in the Secure Element, a chip inside the new iPhones.

"We don’t store the credit card number, we create a device only number," said Eddie Cue, Apple senior vice president of Internet software and services "Each time you pay, we use a dynamic number and a security code."

If a device is lost or stolen, users can tell Find my iPhone to either stop card activity or remotely wipe the device.

Announcing the service during Apple’s keynote last night, Apple CEO Tim Cook called the digital wallet "an entirely new payment process" that should help to make the 200 million card transactions the company processes every day a bit easier.

Apple Pay is "an entirely new category of service," Cook said, looking to replace the "fairly antiquated process" of scrambling around for credit cards and entering chip and PIN codes.

"We love this kind of problem," Cook said, adding it was no surprise that many had tried to update this method but claimed all attempts had so far failed.

Apple will be opening up the API to developers following the launch of iOS 8, meaning companies will be free to get their own payments working with the service.

 

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