Apple claims to have the technology and know-how to process payments through a wave of a smart phone safely, a process that techies have attempted to master for years now. Apple announced that it will release its take on the mobile wallet, Apple Pay. They’ve collaborated with three credit card companies and major retailers including Target to enable consumers to purchase products with a single button tap on the upcoming iPhone or Apple smart watch.
Apple promised that Apple Pay will not store credit card information on smart phones or Apple servers. If their claims of high-security are true, Apple could pull ahead of the pack in terms of mobile payments. At an event in California, Apple CEO Timothy D. Cook said,
“We’re totally reliant on the exposed numbers and the outdated and vulnerable mag stripe. Which all of us know aren’t so secure.”
In a transparent move to support both their mobile devices and Apple Pay, the new payment system will only be available on the company’s two new smart phones, the iPhone 6 and iPhone 6 Plus, as well as the new Apple Watch.
Several thousand retailers like Macy’s and Whole Foods Market are already signed up to accept Apple Pay. Apple Pay operates inside Apple’s existing Passbook app, which enables users to store coupons and tickets digitally. After storing credit card information on the app, customers wave their phone in front of a terminal to pay. Near-field communication (NFC) is used to deliver payments.
Using NFC technology could help keep sensitive information private, according to Tom Pageler, chief information security office at Docusign, a company that manages digital transactions. According to Pageler, NFC would help payment companies identify unusual purchases. For instance, smart phone data can be used to identify purchases made outside a customer’s usual location.
Industry experts believe that if Apple Pay catches on, other companies like Google and Amazon will follow and strike deals with credit card companies and retailers to control a chunk of the mobile purchasing market.