Apple Pay: The smart person's guide

Apple Pay is a mobile payment solution that's accepted by millions of retailers in various countries. This guide covers what you need to know to use Apple Pay.

Image: Apple

Apple Pay is a mobile payment solution based on Near Field Communication (NFC) technology that was released alongside the iPhone 6 and iPhone 6 Plus in September 2014. The service launched with a few hundred thousand point of sale (POS) locations supporting the service, and has grown to a service that is supported by more than two million retail locations in five countries.

In this smart person's guide, you'll learn all of the details surrounding Apple Pay, including how it works and what SMBs and enterprises need to know. We'll continue to update this guide with new information about Apple Pay.

Executive summary

  • What is it? Apple Pay is the mobile payment solution from Apple that lets you easily pay for purchases online in supported apps and at retail locations using credit and debit cards stored securely on your iPhone in the Wallet app.
  • Why does it matter? Apple Pay is the first of the new mobile payment solutions that utilize NFC to wirelessly and securely transmit your payment information to the POS and online through mobile apps, all while maintaining your privacy by not transmitting information such as name, phone number, and address, which can be stored on older magnetic stripe credit and debit cards.
  • When is it available? The first version of Apple Pay was available for compatible device users on October 20, 2014 with the release of iOS 8.1 on iPad and iPhone.
  • Who does this affect? iOS 8 rolled out support for Apple Pay in Passbook. In iOS 9, Passbook was renamed Wallet to offer a clearer picture of the app's capabilities. Businesses that adopt Apple Pay may see numerous advantages to using the system, including satisfied customers, security protection, and lower costs for credit cards. Users with the following devices have the ability to use Apple Pay.
    • iPhone 6 (in-app and in-store)
    • iPhone 6 Plus (in-app and in-store)
    • iPhone 6s (in-app and in-store)
    • iPhone 6s Plus (in-app and in-store)
    • iPad Air 2 (in-app only)
    • iPad Pro (in-app only)
    • iPad mini 3 (in-app only)
    • iPad mini 4 (in-app only)
    • Apple Watch (in-store only)
  • Where does it work? Apple Pay requires support from your card issuer and is currently available in the US, UK, Canada, Australia, China, Hong Kong, Singapore, and Spain.
  • How do you get it? If you choose to do a manual upgrade, iOS 8.1 or later can be downloaded over the air (OTA) by opening Settings | General | Software Update on your iOS device. You can also update by connecting your device to iTunes and selecting Update. Managed devices can be updated through the Apple Configurator app on OS X.

How Apple Pay works

Apple Pay requires a participating card issuer in order to work. Before trying to register cards with Apple Pay, you must first verify the issuer of your debit or credit card supports Apple Pay. You can see a full list of participating card issuers on the Apple Pay support site. This requirement is in place because, whenever a new card is registered, the Wallet app must reach out to the card issuer via the network and request a digital payment card number that is specific to your device.

This device-specific number and payment token is stored on your device securely and protected with multiple layers of security (which I cover in the next section).

Whenever you use your device to make a payment, you must authenticate it with your fingerprint using Touch ID. To do so, follow these steps.

  1. Hold your finger on the Touch ID sensor with your iPhone locked.
  2. Hold your iPhone with your finger still on the Touch ID sensor up to the NFC reader at the retailer where you wish to make a payment.
  3. Your iPhone will illuminate and display the default card registered in the Wallet app (Figure A), and since your finger is on the Touch ID sensor, it will automatically send the payment information to the POS terminal.

Figure A

Image: Apple

You can register more than one credit or debit card with Apple Pay; however, the default card will immediately display when paying for purchases. To switch cards, double tap the iPhone home button on the Lockscreen, select a card, then authenticate with Touch ID. Tap the iPhone to the NFC reader to make the payment.

When the device payment information is requested, Apple will use the stored payment token to generate a unique security code for the transaction, making the payment information very secure in that it can only be used for that one transaction. This means that if the retailer experienced a theft or data breach during which credit card numbers were stolen, your Apple Pay credit card number would not be at risk since it was only good for that single transaction.

Additional resources:

Apple Pay security

Whenever a new card is registered, the registered digital payment card number is stored securely in a new chip on the compatible iPhone, iPad, and Apple Watch models. This chip, called the Secure Element, is designed to keep the numbers stored securely behind your fingerprint data and encrypted to prevent hackers from gaining physical access. In addition, Apple offers a new tool in the Find My iPhone section of iCloud that allows you to easily unregister your Apple Pay cards remotely and disable the feature on the device.

For an in-depth guide on how Apple Pay secures your payment information, check out the Apple Pay security and privacy overview on Apple's website.

Additional resources:

Registering Apple Pay cards

Registering new cards is an easy process that can be completed on any compatible iOS device running the latest version of the mobile operating system. To register a new Apple Pay card, grab one of your credit cards and follow these simple steps.

  1. On your iPhone, open the Wallet app. On your iPad, go to Settings | Wallet & Apple Pay.
  2. Tap Add Credit or Debit Card.
  3. If you have a supported credit or debit card on file with iTunes, enter the card's security code; otherwise, use the camera to capture the information on the credit, debit, or retail store credit card, and then fill in any additional required information.
  4. Tap Next. Your bank will verify the information and decide if you can add your card to Apple Pay. If more information or verification of information is required, you'll be asked to perform that step next.

Once added, you can verify your card any time after adding it, just return to Settings | Wallet & Apple Pay on your iPad or iPhone, and then follow the verification steps. After your card is verified, you can start using it on Apple Pay in compatible apps and in-store.

Additional resources:

What Apple Pay means for small to medium businesses

For small or medium size businesses that want to be on the cutting edge and adopt Apple Pay, there are a lot of advantages to doing so.

One advantage it that the barrier to entry is extremely low, especially if you already use readily available POS systems like Square; or, you can order compatible card readers from your existing credit card processor. If you've already upgraded your business' credit card readers to NFC-style readers that also accept chip cards, chances are, you meet the requirement and just need to talk with your credit card processing company to have the NFC payments feature enabled on the reader. The great thing about NFC is that it works on all major phones and not just ones that work with Apple Pay — this includes Android and Samsung Pay.

Once you begin accepting Apple Pay, Apple offers resources to help you market this opportunity. First, you can specify that you accept Apple Pay inside of the Maps Connect portal (i.e., the portal used to get your business listing inside of Apple Maps); second, you can apply to get a free Apple Pay sticker set from Apple to advertise that you accept the service in your location.

Additional resources:

What Apple Pay means for enterprises

Larger organizations that use Apple Pay benefit from the same niceties as small and medium businesses that accept Apple Pay, and there are even more opportunities for business that do online transactions; this is because Apple Pay also works in apps to allow for easy purchases through your existing credit card processor.

If your business has a brick-and-mortar location or locations, you can market your app through the same means as SMBs. Apple provides a special listing inside of the App Store for larger apps that accept Apple Pay.

Not only are apps that accept Apple Pay great for users, they can also be great for the company, because you don't have to store and process traditional credit card numbers that, if theft happens, will result in damages. With Apple Pay, because the pin is re-generated with every use, the number is secure when stored on your servers, providing lower damages if a system breach were to occur.

In the US, the following credit card providers can work directly with Apple Pay.

  • Adyen
  • Bank of America Merchant Services
  • Beanstream
  • Braintree
  • Chase Paymentech
  • CyberSource
  • First Data
  • FIS ClearCommerce
  • Global Payments
  • Shopify
  • Simplify
  • Stripe
  • TSYS
  • Vantiv
  • Worldpay

Additional resources:

Version history

iOS 8.1

The initial release of Apple Pay was in iOS 8.1 on October 20, 2014.

iOS 9.0

The version of Apple Pay in iOS 9.0 was released on September 16, 2015. The Passbook app's name was changed to Wallet in favor of additional functionality coming in the future

Apple Pay support by country and date

  • UK: July 14, 2015
  • Canada: November 17, 2015
  • Australia: November 19, 2015
  • Hong Kong: January 2016
  • Singapore: January 2016
  • Spain: January 2016
  • China: February 18, 2016

Additional resources:

About Cory Bohon

Cory Bohon is an indie developer specializing in iOS and OS X development. He runs a software company called Cocoa App and is also a developer at MartianCraft. He was introduced to technology at an early age and has been writing about his favorite te...

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