APPLE PAY – the evolution of card payments

APPLE PAY – is the next evolution of card payments industry

Apple pay is a new service offered through Iphone for making POS transactions as well as online payments. Apple incorporated to their Iphone 6 and Iphone 6 plus a secure module which serves as a chip for storing credit card data. This secured element is stored in a chip module in the phone and is according major payment companies and ISO standards for card payment. Banks may download directly and securely the card data into the phone and then this data will be stored in a secured element. Consider this like the bank is personalizing a card and is giving it to you (with card name, expiry date, Magnetic stripe data and chip data). But in our case only chip data is downloaded to you phone and then you can use it for payments. I am not sure if this can be done with multiple cards in one phone but I know that other companies can. Actually this is not the first time that Apple did this, Samsung introduced a similar payment scheme with Samsung Galaxy S3 and in the next ones as well.

How this will work ?
Secure Element is in deed some part of the NFC system of the phone, and with an antena, the phone turns into a Contactless Card. See Here info from VISA. After touching the phone into a contactless POS device in shops the transaction initiates. If the amount of the purchase is lower than ex. 40$ no PIN code is required, but if it is above, in your Iphone screen you will need to enter a PIN code, this is a PIN code provided by your bank. In Iphone case maybe can be used also by scanning your finger which is a really cool way and increased security.

Please read more here about NFC payments:

Not only an NFC payment.
Apple now introduces also virtual wallet connected to this platform where you can pay with in several shops in US. This is indeed a revolutionary payment instrument, and we think that the future of payments will rely on cloud wallet. For example, don’t you think that Paypal is a very convenient way to pay online? With iphone you will be able to make purchases in several big online retailers easily.

Apple Watch.
The same technology is integrated to your wrist and you will be able to pay also from your watch. The newly launched Iwatch will make this possible in the next couple of months when the watch will be released.

A summary of the yesterday key notes is available below :


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10:56 am “Apple Pay will forever change the way all of us buy things.”
10:56 am Tim Cook coming back on stage.
10:56 am Launching in US starting next month. Available as free update to iOS 8. Working hard to bring Apple Pay to more countries.
10:55 am New Apple Pay API coming.
10:55 am Sephora, Starbucks, Panara Bread, Starbucks.
10:55 am GroupOn adding ApplePay to their app. Uber. At Bat, Apple Online Store, OpenTable.
10:54 am With Apple Pay, you can check out with a touch.
10:54 am Target integrating Pay into their shopping app.
10:53 am one-touch checkout for commerce, no card entry, no typing addresses, no card info shared with merchant.

10:53 am “What about online?”
10:53 am And Disney, including Disneyworld.
10:53 am Whole Foods, Apple Retail.
10:52 am Citi, Bank of America, Capital One, Wells Fargo, Chase many more banks. 83% of credit cards purchase. Works with 220,000 us merchants. Walgreens, Duane Reade, Macy’s, Bloomingdales, Staples, Subway, McDonalds (including Drive Through).
10:51 am Pay starts in US with Amex, Mastercard and Visa. Credit cards and debit cards.
10:51 am Cashier doesn’t see your name, credit number or security code.
10:51 am When you go to a physical location, Apple doesn’t know what you bought, where you bought it, or how much you paid. Transaction is between you, the merchant and your bank.
10:51 am Security is at the core of Apple Pay. So is Privacy.

10:50 am If iPhone is lost or stolen, Find My iPhone can suspend all payments. Since card number is never stored on the device, no need to cancel credit card.
10:50 am Card number is never stored nor shared. Stored in Secure Element. Uses one-time number and dynamic security code.
10:50 am Hundreds of millions of credit cards and debit cards. Easy to add new card or use card from iTunes. Use iSight camera to take picture of physical credit card.

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10:49 am Shows all credit cards in Passbook.
10:49 am Touch ID plus Secure Element chip. Stores all payment information encrypted and securely.
10:49 am Apple Pay is built into every iPhone 6 and 6 Plus. NFC antenna built across the top.
10:48 am Eddy Cue coming on stage to discuss Pay.
10:48 am “It is so cool!”
10:48 am Apple Pay used by holding thumb on Touch ID button.
10:48 am Shows video, multi-step process replaced by holding phone to a sensor. “That’s it!”

10:47 am This is exactly what Apple does best. We’ve created an entirely new payment process, and we called it Apple Pay.
10:47 am Most people that have worked on this have started by focusing on creating a business model centered around their self interest instead of focusing on the user experience.
10:46 am So easy to lose your card or have it compromised. No wonder that people have dreamed of replacing these for years.
10:46 am Totally reliant on the exposed numbers and outdated and vulnerable magnetic stripe interface.
10:46 am This whole process is based on this little piece of plastic.
10:45 am Showing a video of the “traditional” credit card payment process.
10:45 am Fairly antiquated payment process.


Image courtesy of


Citi, Bank of America, Capital One, Wells Fargo, Chase many more banks. 83% of credit cards purchase. Works with 220,000 us merchants. Walgreens, Duane Reade, Macy’s, Bloomingdales, Staples, Subway, McDonalds (including Drive Through).

Image courtesy of

10:45 am 200 million daily US transactions.
10:44 am Payments is a huge business.
10:44 am “We spend $12 billion in credit and debit transactions per day in the US”

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