Apple Hopes To Lead Mobile Payments With Apple Pay

Apple Hopes To Lead Mobile Payments With Apple Pay

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Tech experts have long since predicted a world where people will pay for retail products with just a few clicks on their smartphone or simply by waving their smartphones. Apple, in its latest product launch, just announced that it’s not only possible to do that but it is, in fact, rolling out that service on their new devices, which were also introduced during the event.

Using the new iPhones and Apple’s smartwatch, users will be able to purchase goods from different retailers – from boutiques to supermarkets to restaurants. The company has teamed up with major credit card companies such as Visa, MasterCard, and American Express.

The service, called Apple Pay, is the company’s own version of mobile wallet, which Forrester Research predicts to reach $100 billion over the next five years in the U.S., however, it will remain to be seen if consumers are willing and ready to start paying using a digital device.

With the use of an NFC (Near Field Communication) antenna planted on the device, users just have to wave or put their device near a reader and place their finger on the fingerprint sensor, the Touch ID. This method is different from what previous companies, which attempted to introduce mobile payments before Apple, use.

Apple said that it will not store users’ credit card information on its servers or on the devices, hoping that these promises, including security, are enough to convince consumers that Apple Pay is safer to use than a credit card.

The timing couldn’t be more perfect, too. Retailers are hoping to change their form of transaction from their current payment infrastructure to a safer chip mode of transaction before next year ends. If Apple Pay did manage to catch on with consumers, retailers will be encouraged to use hardware needed for mobile transactions – one of the hindrances to the growth of paying using phones.

Tim Cook, Apple’s chief executive, said that the service will only be available on the new iPhone 6 and iPhone 6 Plus, as well as on the Apple Watch, which will be available in 2015.

If Apple Pay becomes a success, meaning consumers start using their smartphones and devices to purchase goods, it could make other companies like Microsoft, Google, and Amazon to also come out with the same payment system and make similar deals with credit card companies and retailers, broadening the use of mobile payments.

Several other companies have already tried to make mobile payments possible before but none of them was able to really connect with consumers. Visa’s chief executive, Charles W. Scharf, is hoping that their security and the experience of Apple payment will be the answer to the long hurdle of mobile wallets.

According to Apple, when you buy an item using Apple Pay, it does not know the price of the item, what it is, or where you bought it. The transaction is going to be just between the buyer, the retailer, and the bank. It also added that the cashier won’t see any information such as the consumer’s name and credit card number.