Behind the successful launch on iPhone 6 and iPhone 6 Plus and the teaser release of Apple Watch is an ambitious project to kill off the wallet.
During Apple’s big media event last 9 September 2014, the company initiated a new service which will be called Apple Pay and it aims to take all of the pain points from having multiple credit cards and identification cards in everyone’s wallets.
Although Google has tried to do this in the past with its Google Wallet app, Apple is going to try to take advantage of its hundreds of millions of iTunes accounts to get the job done.
Not surprising, Apple Pay will take advantage of NFC capabilities on the iPhone 6 to help enable mobile payments. Apple says that Apple Pay stores information securely through encryption and will integrate with the Apple Passbook application.
The app will support credit cards from MasterCard, Visa and American Express at launch and will also be supported by the six largest American banks. Apple has also worked out deals to get Apple Pay supported at more than 220,000 retail outlets at its launch.
The card-issuing banks have agreed to pay a per-transaction fee to Apple to be included on the phone, according to people familiar with the situation. While the amount of the fee couldn't be determined, banks believe that cost will be offset by the number of transactions that consumers make on the phone. The banks collect fees from merchants on every credit and debit-card transaction.
Apple also took some not-so-subtle digs at Google by emphasizing that it doesn’t collect user data and financial data from customers. Furthermore, it says that "Apple doesn’t know what you bought, where you bought it, or how much you paid for it" when you use Apple Pay.
The company will require a thumbprint scan on its new iPhone 6 smartphone to make the tap-and-go payments—meaning a stolen device can't be used for a shopping spree. It wasn't immediately clear how Apple would authenticate payments on the smartwatch.
The move toward paying with just a phone is the latest development in an industry that once relied on carbon paper and manual processing machines known as "knuckle busters." Credit cards and debit cards have steadily eclipsed cash and checks, representing more than half of retail goods and services purchased by Americans since 2003.
During Apple’s big media event last 9 September 2014, the company initiated a new service which will be called Apple Pay and it aims to take all of the pain points from having multiple credit cards and identification cards in everyone’s wallets.
Although Google has tried to do this in the past with its Google Wallet app, Apple is going to try to take advantage of its hundreds of millions of iTunes accounts to get the job done.
Not surprising, Apple Pay will take advantage of NFC capabilities on the iPhone 6 to help enable mobile payments. Apple says that Apple Pay stores information securely through encryption and will integrate with the Apple Passbook application.
The app will support credit cards from MasterCard, Visa and American Express at launch and will also be supported by the six largest American banks. Apple has also worked out deals to get Apple Pay supported at more than 220,000 retail outlets at its launch.
The card-issuing banks have agreed to pay a per-transaction fee to Apple to be included on the phone, according to people familiar with the situation. While the amount of the fee couldn't be determined, banks believe that cost will be offset by the number of transactions that consumers make on the phone. The banks collect fees from merchants on every credit and debit-card transaction.
Apple also took some not-so-subtle digs at Google by emphasizing that it doesn’t collect user data and financial data from customers. Furthermore, it says that "Apple doesn’t know what you bought, where you bought it, or how much you paid for it" when you use Apple Pay.
The company will require a thumbprint scan on its new iPhone 6 smartphone to make the tap-and-go payments—meaning a stolen device can't be used for a shopping spree. It wasn't immediately clear how Apple would authenticate payments on the smartwatch.
The move toward paying with just a phone is the latest development in an industry that once relied on carbon paper and manual processing machines known as "knuckle busters." Credit cards and debit cards have steadily eclipsed cash and checks, representing more than half of retail goods and services purchased by Americans since 2003.
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