Apple announces Apple Pay

Apple PayAlong with the new iPhone 6, iPhone 6 Plus and Apple Watch (and a small OS upgrade called iOS 8), Apple today announced a new mobile payment service aptly called Apple Pay. The NFC-based technology promises to “transform mobile payments with an easy, secure and private way to pay.”

Initially available only in the U.S., Apple Pay will launch with support for credit and debit cards from the three major payment networks, American Express, MasterCard and Visa, issued by popular banks such as Bank of America, Capital One Bank, Chase, Citi and Wells Fargo. Aside from being supported in Apple’s 258 U.S. retail stores, national retailers such as Bloomingdale’s, Disney Store and Walt Disney World Resort, Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens and Whole Foods Market are all onboard as well. In-app purchases will also be supported

Apple Pay is built around NFC, a dedicated chip called the Secure Element and the security and convenience of Touch ID. Even better, Apple Pay will not store actual credit or debit card numbers on the device or Apple servers. As Apple explains, “Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your iPhone or Apple Watch. Each transaction is authorized with a one-time unique number using your Device Account Number and instead of using the security code from the back of your card, Apple Pay creates a dynamic security code to securely validate each transaction.”

“Security and privacy is at the core of Apple Pay. When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services. “Apple doesn’t collect your purchase history, so we don’t know what you bought, where you bought it or how much you paid for it. And if your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device.”

Apple Pay will roll out as a free update to iOS 8 for the iPhone 6 and iPhone 6 Plus starting in October. It will also work with the Apple Watch.

Source : Apple