Mobility Smart Person's Guides

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 many 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.

SEE: All of TechRepublic's smart person's guides

Executive summary

  • What is Apple Pay? 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 Apple Pay 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 Apple Pay 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 Apple Pay 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. With iOS 10, Apple added the ability for online payments as well using the Safari web browser. Users can easily pay for items using websites that support the Apple Pay payment platform.
    • 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)
    • iPhone 7 (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 Apple Pay work? Apple Pay requires support from your card issuer and is currently available in the following countries:
    • Australia
    • Canada
    • China
    • France
    • Guernsey
    • Hong Kong
    • Ireland
    • Isle of Man
    • Italy
    • Japan
    • Jersey
    • New Zealand
    • Russia
    • San Marino
    • Singapore
    • Spain
    • Switzerland
    • Taiwan
    • UK
    • USA
    • Vatican City
  • How do I get Apple Pay? 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.

SEE: Special report: Cybersecurity in an IoT and mobile world (free PDF) (TechRepublic)

How does Apple Pay work?

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.

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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.

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How to register 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.

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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.

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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
  • Authorize.net
  • Bank of America Merchant Services
  • Beanstream
  • Blackbaud
  • Braintree
  • Chase Paymentech
  • CyberSource
  • First Data
  • FIS ClearCommerce
  • Global Payments
  • Shopify
  • Simplify
  • Stripe
  • TSYS
  • Vantiv
  • WePay
  • WorldNet
  • Worldpay

Other countries that support local payment processors can be found on the Apple Pay Developer Website.

In addition to accepting Apple Pay in apps, website owners can also accept Apple Pay through their e-commerce websites. You can either do this yourself, or use one of the many e-commerce platforms available that support Apple Pay. Apple has partnered with the following e-commerce platforms to allow for Apple Pay support for client purchases:

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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

iOS 10.0

This version of Apple Pay in iOS 10.0 was released on September 13, 2016 via an update to iOS version 10.0. It added support for Apple Pay in Safari both locally on the device through mobile Safari and integration using secure Handoff to pay for items through Safari for Mac.

iOS 11.0

Scheduled to be released in Fall 2017, this version of iOS adds person-to-person payments via Apple Pay. See the "Apple Pay Person-to-Person and Apple Pay Cash" section below for more information on this upcoming feature.

macOS 10.12 Sierra

Apple expanded Apple Pay to the Mac with macOS 10.12 Sierra. This feature works through the Handoff features on your Mac, Apple Watch, and iPhone. When you visit a website that accepts Apple Pay payments and choose to check out with Apple Pay, a dialog will appear, allowing you to select which card you wish to use from a nearby iOS or watchOS device. On the screen of the Apple Watch or iPhone, you will see a confirmation of the payment, and a requirement to process the payment (on Apple Watch, it's double-pressing the side button; on the iPhone, it's authenticating with Touch ID). Once you do this, the payment is processed just like with in-app purchases.

If you own a MacBook with Touch ID, you have the ability to use Apple Pay directly on the Mac without needing any nearby Apple Watch or iPhone. If your Mac has this ability, check in System Preferences | Wallet & Apple Pay to set up your payment cards.

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Apple Pay person-to-person and Apple Pay Cash

At WWDC 2017, Apple announced that iOS 11 will support person-to-person payments using Apple Pay and iMessage. This is a new iMessage app available to Apple Pay users, giving you the ability to send money using your credit or debit cards to someone directly through the Messages interface.

When someone receives money, it's deposited into your Apple Pay Cash card. Think of this as a prepaid credit card--when you receive money the cash is placed on this card and is available for spending through Apple Pay (in apps, online, or in stores), sending through iMessage to someone else, or depositing into your bank account. Initially this feature will only be available to devices and accounts in the US on iPhone SE, iPhone 6 or later, iPad Pro, iPad (5th generation), iPad Air 2, iPad mini 3 or later, and Apple Watch.

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Competitors to Apple Pay

While iOS doesn't have the ability for other payment providers to utilize wireless payments, there are competitors to Apple Pay. Apps like Walmart Pay, McDonalds gift cards, Starbucks cards, and other store cards that allow you to pay using QR codes or barcodes at checkout are competitors, albeit, in a smaller market.

On other devices, direct competitors include Samsung Pay and Google Pay, which are both NFC contactless payment systems.

With the upcoming person-to-person payment system with Apple Pay, the competitors include Square Cash, PayPal, and other similar services.

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