Currency digitalization is a part of this century revolution. We have moved out from dealing with bills and papers and moved on to e-commerce, Digital Cards for debit and credit. Meanwhile the technology leaders are accelerating to push people with more easier, advanced and digital way to deal with transactions. Near Field Communication (NFC) has been here for a long time now. But the common reluctance of penetrating in a new way for transactions was observed. The adaption rate had been quite slow.
Apple Pay seems to have conquered all the basic hindrances, being the leader in devices and eco-system. The unique style of not only developing the technology, but also providing the initial eco-system for faster adoption, may help Apple in hitting at Apple Pay for successful adoption.
So How Apple defines Apple Pay as distinct from NFC.
1) Easier:
The facility of one touch to pay with Touch ID! Make payments seamlessly, if you have a preconfigured Credit Card in your Passbook. You only need to place your iPhone 6 near NFC receiver. Validate the payment with your finger on Touch ID. That’s it!!! Confirmation of the payment will also come via a subtle vibration and beep. This also helps us understand that Touch ID sensor introduced last year was not only for unlocking the device. The sensor is going just out with its very first application and is going to be an important biometric and security standard that will identify your device more than just a Phone.
Easier and simple workflow for payment also flows down to the game changing Apple Watch device, which will be launched early 2015. But I am a bit confused about the security of the devices. We still do not have the exact specs of Apple Watch. But initial understanding is that, there is no biometric sensor which would otherwise help us to validate the payment. And it’s just the button below the digital Crown that will help us initiate the payment.
2) Security:
Security is an important and driving characteristic, which I believe, will help Apple distinguish them within the realm of payment technologies. Basically, whenever we try to pay via our credit or debit card, we physically or digitally provide all our details about the card to the vendor, which means there is some potential threat as the card number and identity is visible. Apple pay instead assigns unique Device Account Number to every card that is added to the device. This number is stored appropriately in a secure element, which is a dedicated hardware chip available in iPhone 6, and Apple Watch. This number is never transmitted to Apple Server. And whenever a purchase is made, the device account number alongside with a transaction specific dynamic security code is used to process the payment. This means that the details of the card are never shared with the merchants.
In case of loss, theft of the device, the Find My Phone app is extended to quickly put the device in lock mode. This will disable the payments immediately. But we also need to make sure that this application supports Apple watch with iPhone as well for security.
Even with this unique security feature available, Apple has been always been in news for breach of user’s personal data for statistics or analytics. Answer to this lies in Apple pay and it is that Apple is committing itself to not save any of your transaction information. Only most recent purchases will be visible in Passbook.
3) In App Purchase:
Extending itself to support the complete ecosystem is what apple pay is going ahead with. Not only stores payment with NFC, but same is true with In App payment as well. Till date, In App purchases were used to buy digital content. Now you can buy physical goods or even services with In App Apple pay. This also means that Apple is just going to facilitate the payments with the use of the security standards and moving ahead with it would be a responsibility of the payment solution providers to complete the payment transaction. Those solution providers which are not part of Apple pay with their SDK’s have an alternative solution to provide their own server-side solution to process payments. Now this would be a threat to the existing technologies like PayPal. Which are not at present part of apple pay payment gateways solution providers? Whereas in the near future they may be forced to use Apple pay for In App purchases discarding the current sdks, everybody may envision this if we are aware of current In App purchase review guidelines by Apple on iTunes.
As I have mentioned it above, Apple always comes up with a complete eco-system and not only as a technology. Integrated with Visa, Master card and Amex, Apple pay now is instantly available in almost more than 20 k stores including big retail chains such as Nike, Subway, Walgreens etc. and also in many top of the chart apps, so that iPhone 6 users start using it sooner. As of now it is only available in the US.
As far as the device is concerned it will be only available on a new device family which is iPhone 6, iPhone 6 plus and Apple watch paired with iPhone 5, iPhone 5c, iPhone 5S, iPhone 6 and iPhone 6 plus. But Apple watch is only available in In-store purchases only.
