The day of cashless payment is pretty much here. Gone are the days of a billfold stuffed with bills and credit cards or debit cards. Is this a good idea? Is it safe and secure? Is it easy to use? Here are my observations after six months of using Apple’s new Apple Pay system.
What is Apple Pay?
Apple Pay is Apple, Inc.’s new payment system that lets you use your Visa, MasterCard, and American Express as a way of paying for goods and services without actually using a physical credit card or debit card.
Most larger banks and regional bands are now providing credit and debit cards that work with Apple Pay. Hundreds of thousands of stores and service providers (both physical locations and on-line services) accept Apple Pay in the United States and soon in foreign countries.
What does it cost, and how easy is it to use?
It does not cost the consumer anything. The merchant gets the sale, and pays the bank a small percentage for the transaction. The bank gives Apple an even smaller percentage of the transaction. If the store has the proper POS (point-of-sale) machine – where you usually swipe your card or “tap” your card to complete the transaction they will most likely accept Apple Pay now or in the near future.
I’ve used it at Panera Bread, McDonalds, Subway, Wesco, Meijer (regional supermarkets and gas stations) and many other locations. It even works with newer vending machines for pop, snacks or sandwiches.
You use it with either an iPhone 6 or 6 plus smartphone, or with the new Apple Watch. To use it with the iPhone touch the home button/finger print scanner to approve the transaction and then “touch” the phone to the POS machine. To use with the Apple Watch simply touch the side button twice and then “touch” your watch to the POS machine. Some POS machines still require a signature (credit card) or a PIN number (debit card) to finish the transaction.
Think of it… no more fishing in your pocket, bag, or purse for your wallet, then finding the debit card or credit card you want to use and then handing that card over to a perfect stranger who may or may not use it improperly.
But, is it safe to use?
The Apple Pay system is tied to the hardware and software on your iPhone or Apple Watch. Apple has cleverly set up a secure system that does not actually use your credit card or debit card number. The system kind of goes like this: Tom’s MasterCard is issued by Chase Bank and has the card number of XXX (and so on). The iPhone and Apple Watch convert that card number to a on-device chip that generates a number that Chase Bank knows belongs to Tom. If the phone or watch are stolen they can’t be used to make purchase because…
- The iPhone requires the users finger print and body warmth to activate the approval system.
- The Apple Watch requires the iPhone to pair the two devices, and if the watch is taken off the users arm it won’t activate the approval system without entering a PIN associated with the watch.
- Neither the iPhone nor the Apple Watch use the card holders actual account number, nor is that information sent to Apple.
The bottom line
Apple Pay is the payment system of the future. A system that has bank and credit union support by hundreds of banks from coast to coast and hundreds of thousands of retail and service providers. It is easy to use, safe, and convenient.
If you want to find out more about Apple Pay click here: Apple Pay Web Site. If you want to find out if your bank or credit union supports it click here: Apple Pay Bank List If you want to find out the current retail and service providers who support it click here: Apple Pay Retail and Service List