Week 5: What is Apple Pay? We've got answers

Apple Pay in action. Image credit Wired.com

Apple Pay in action. Image credit Wired.com

With the release of iOS 8.1, Apple has activated their payment system, Apple Pay, for the iPhone 6 and 6 Plus, and the upcoming Apple Watch (coming in early 2015).

Apple Pay allows for easy and painless transactions in your favorite retail stores, while also allowing you to make purchases online safely, securely, and quickly.

We know you've got a lot of questions about Apple Pay, so we tried to answer the most common ones for you!

Is it secure?

It's more secure than a credit card. Here's why.

When you set up your debit or credit card with Apple Pay, your card is stored securely in your iPhone in what's called the Secure Element — a sacred place that is inaccessible unless Touch ID is authorized with the correct fingerprint. That's right, your fingerprint is the key! Once your card is stored, Apple generates a surrogate token code that is transmitted at the time of purchase in the place of your actual card number or name. Your actual credit or debit card information is never stored on Apple's or anyone else's servers.

This allows for a greater level of security than handing someone a piece of plastic that can be skimmed, copied, or be entered into a database that can be hacked, like the recent Target and Home Depot hacks.

Apple Pay is so secure, that Apple was able to negotiate the same processing fees as if the card is present at the time of transaction, even though it doesn't have to be. That's a big deal.

What if my phone gets stolen?

Nothing to worry about — you can suspend payments to any device that is carrying your card information by activating Lost Mode using Find My iPhone.

Even if you didn't suspend payments, however, the person could only make purchases if they had a valid TouchID fingerprint anyways, so you're double protected!

What are the requirements?

To use Apple Pay, you must have an iPhone 6 or 6 Plus on iOS 8.1, have a participating bank or credit card issuer, and be in a participating retail establishment.

What banks and cards are participating?

Here is a list of banks and card issuers that are participating in Apple Pay:

  • American Express
  • Bank of America
  • Capital One
  • Chase
  • Citi Bank
  • Wells Fargo

Banks Coming Soon:

  • Barclay Cards
  • Navy Federal Credit Union
  • PNC
  • USAA
  • US Bank
  • Regions?* This has not been confirmed.

If you deal with a local bank or credit union, check with them directly to see if they have plans to support Apple Pay.

How do I set it up?

Ok, so you're on board and want to set it up: great!

Once you have iOS 8.1 on your iPhone 6 or 6 Plus, setting up Apple Pay is easy — follow these instructions from Apple.

To add a card on iPhone 6, iPad Air 2 or iPad mini 3, go into Settings, open Passbook & Apple Pay, and select “Add Credit or Debit Card”. On iPhone, you can also just open Passbook, then swipe down and tap the plus sign. From there, use your iSight camera to enter the card information or type it in manually. The card you had stored in iTunes is your default payment card, but you can always switch it in Settings.

What retail stores accepts Apple Pay?

Here is a list as of October 23, 2014. Businesses in bold are near Birmingham, AL, while businesses with an asterisk are near the Minneapolis, MN area.

  • Aéropostale*
  • American Eagle Outfitters*
  • Apple Retail Stores*
  • Babies R Us*
  • BJs
  • Bloomingdales
  • Champs Sports*
  • Chevron
  • Disney Store
  • Duane Reade
  • Extra Mile
  • Foot Locker*
  • Footaction
  • House of Hoops
  • Kids Foot Locker*
  • Lady Foot Locker*
  • Macy's*
  • McDonalds*
  • Meijer
  • Nike*
  • Office Depot*
  • Panera Bread*
  • Petco*
  • Radioshack*
  • Run (by Foot Locker)
  • Six:02
  • Sports Authority*
  • Subway*
  • Texaco
  • Toys R Us*
  • Unleashed (by Petco)
  • Walgreens*
  • Wegmans
  • Whole Foods*

This list is constantly being updated, so head over to Apple's Apple Pay website for a more up-to-date list.

How do I use Apple Pay?

So you have Apple Pay ready to go and you're in a participating retail store, here's how it works.

Hold your device up to the credit card terminal marked with one of the above icons and your card in Passbook will automatically pop up and ask for your TouchID authentication. If you place your fingerprint on the TouchID sensor for about three seconds, your phone will "Ding!" and the transaction is complete! It's that simple.

Here's a great hands-on video from The Verge that demonstrates and explains Apple Pay use out in the wild.

Conclusions

Apple Pay is a great service that, so far (knock on wood), has been going off without a hitch. 

It may seem like a small increase in convenience, but we are looking forward to the day when carrying your debit or credit card is a thing of the past, creating a more secure, private, and frictionless purchase process for everyone.

We love Apple Pay, and we think you will too.