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Apple Pay explained

A nice, neat explanation of the salient points of Apple Pay:

User:

  • iTunes account with Visa or MasterCard or Amex card on file and issued by the
    Apple Pay logo

    Apple Pay mobile payments explained

    most popular banks, American Express, Bank of America, Capital One Bank, Chase, Citi and Wells Fargo at availability with additional banks coming quickly thereafter including Barclaycard, Navy Federal Credit Union, PNC Bank, USAA and U.S. Bank.

  • iPhone with NFC, embedded Secure Element, Touch ID (eg. iPhone 6, 6+ and Watch)

Merchant:

  • POS enabled for contactless payment (e.g. PayPass, payWave, ExpressPay)
  • No new agreement
  • Fee is normal swipe card fee
  • No liability change (Issuer liability)

Issuing bank:

Integration of cards to Apple’s system

Fees:

  • No charge for users, merchants or developers for transactions
  • Agreement with each individual bank and cut of transaction to Apple

Where and when:

  • From October via a free upgrade of iOS 8 to iPhone 6 and 6+
  • USA
  • 220,000 locations with contactless payments enabled
  • Other countries will come

How:

Instead of using the PAN (card number), 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.

Online shopping in apps with iPhone with the touch of a finger.

  • At checkout chose Apple Pay, authenticate and signing of transaction via Touch ID.

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