Apple Pay: Payments Will Be Friction-Free and Secure At Last

Again as predicted, Apple announced a mobile payments service akin to Google Wallet today. Using NFC it will allow (US-based) iPhone 6 owners to make contactless payments using machines installed at 220,000 merchants, as well as a number of applications that can be installed on the iPhone.

Stepping aside form the obvious concern about trusting credit card information to a company that has just suffered a fairly major and apparently long-term, failure to secure its users cloud accounts, this was probably the biggest announcement of Apple's day.

What I haven't been able to establish as yet is whether these contactless payments utilise an existing payment system (Visa's Payway or Mastercard's PayPass) and if so why Apple haven't been able to roll this out worldwide.

Outside of the US, contactless payment is fairly ubiquitous and being heavily pushed by both Visa and Mastercard. If utilising Apple's payment system is going to require a massive upgrade to merchant's terminals I'd be very surprised if it will see any real take-up. Let's hope that's not the case because there are real benefits to Apple's Pay system.

On the new iPhone I like the way that Apple have managed the security element of authorising a payment - you need to hold your finger on the Touch ID sensor when tapping the terminal. However the Apple Watch has no such sensor, which suggests that it will either be a less secure method of making payments, and hence enforce a lower PIN-free transaction limit, or will utilise some proximity awareness to your iPhone to provide some confidence in ownership.

This is probably the biggest selling point that Apple has to push sales of the iPhone 6 and Watch (when it arrives) especially given Google's failure to gain acceptance of it's functionally similar Wallet application.

Paying with your iPhone 6 will be an instant security upgrade for all card users and that makes it far and away the best piece of news to come out of Apple's keynote today.


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