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How to Take a Bite Out of ApplePay

Posted on 9.23.2014

Touted for weeks and formally unveiled at its event on Sept. 9, Apple finally introduced Apple Pay to the world.

The new mobile payment offering will be available for use in Oct. 2014 on iPhone 6 and iPhone 6 Plus, as well as Apple Watch in 2015. Apple Pay operates on near-field communication (NFC) technology, a chip called the Secure Element and Touch ID. To leverage the mobile payment platform, consumers must add their credit or debit card files to Passbook, which can be done with their phone’s camera or by manually entering the credit card information.

At launch, Apply Pay supports credit and debit cards from American Express, MasterCard, Visa, Bank of America, Capitol One, Chase, Citi and Wells Fargo. Moreover, the payment functionality will be available at all Apple retail stores in the U.S., as well as big-name retailers like Bloomingdale’s, Disney Store and Walt Disney World Resort, Duane Reade, Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens and Whole Foods Market.

“Security and privacy is at the core of Apple Pay. When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services. “Apple doesn’t collect your purchase history, so we don’t know what you bought, where you bought it or how much you paid for it. And if your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device.”

It is important to note that when credit or debit cards are added to Apple Pay that the actual card numbers are not stored on the device. Rather, a unique device account number is assigned, encrypted and stores in the Secure Element on the iPhone or Apple Watch. Additionally, each transaction is authorized with a one-time unique number using the Device Account Number instead of a card’s security code to validate each transaction.

In addition to brick-and-mortar shops, consumers will be able to use Apple Pay in certain apps via Touch ID. This functionality will enable consumers to checkout with just a touch, allowing them to skip filling out long forms for shipping and billing information. At launch, Apple Pay will be available in apps for Groupon, Instacart,, OpenTable, Panera, Sephora, Starbucks, Target,, Uber and Apple.

Although Apple hasn’t yet released information about how other retailers can offer Apple Pay in their brick-and-mortar stores, the first step for those who are interested is to get prepared by adopting NFC technology. Developers can also leverage Apple Pay APIs to get their apps ready for the new payment offering.

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