Last night’s announcement from Apple CEO Tim Cook saw the release of a new iPhone with a mobile payments tool called Apple Pay.
Apple has finally delivered on three of its biggest promises – a larger iPhone, an iWatch, and most importantly, mobile payments on both. With Apple Pay, the tech giant is playing catch-up with a tap-to-pay system that has already been implemented by others like Google. But Apple’s new payment system might see mobile payments technology actually taking off.
Apple CEO Tim Cook said that all the previous attempts to create a system of mobile payments have “failed,” focusing more on their business model than on the user experience. With Apple Pay, iPhone users’ payment information is stored securely with software encryption in the company’s Passbook app. Credit cards can be added to the app by taking a photo of the card with the iPhone.
Apple Pay has also implemented biometric security to reassure customers of the security of their payments. iPhone users hold their phone to an NFC terminal, then hold their fingerprint onto the phone’s fingerprint sensor to validate the wireless payment. Instead of transmitting credit-card numbers, merchants receive a one-time payment number and security code.
Apple certainly has support for its new venture. The company admitted to previous rumours that Mastercard and Visa will be supporting the service in the US, as well as American Express. Citibank, Bank of America, Capital One, Chase, and Wells Fargo were all announced as partners, and McDonalds will be adding the technology to its stores.
Apple stated the obvious during the event – payments are “a huge business.” Twelve billion dollars’ worth of sales happen on credit cards during more than 200 million daily transactions in the U.S. alone. But there has been a slow uptake of mobile payments in the past. Whether the iPhone will make a difference is still yet to be seen.
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