Apple Pay – Contactless payment with your iPhone

Apple’s new ‘Apple Pay’ payment system is a new way of paying with your iPhone. We explain how it works and what to be aware of.

Apple Pay takes off where contactless payment left off, bringing the convenience of swiping for payments to your iPhone.

The idea is that eventually you won’t need your real wallet, but rather all your cards will be stored digitally on your phone. But how exactly does it work, and what are the benefits and risks?

What banks are on ApplePay?

Apple Pay launched in the UK on the 15 April 2015, it is only available on the iPhone 6 and the iPhone 6 Plus, Apple Watch and iPad Air 2. But whether you can use it depends on whether your bank supports ApplePay.

Banks that support ApplePay:

• Natwest
• Nationwide
• Royal Bank of Scotland
• Santander
• Ulster bank
• MBNA
• American Express
• HSBC
• First Direct
• Halifax
• Bank of Scotland
• Lloyds
• M&S Bank
• Capital One
• Barclays

Banks planning to join soon:

• TSB

Banks who have not yet guaranteed to join ApplePay:

• The Co-Operative Bank
• Clydesdale and Yorkshire Bank

Apple Pay – How it works

Apple Pay is a new way of paying for goods with your phone instead of your card or physical money.

The technology works by registering an existing bank card to your iPhone 6 or iPhone 6 Plus. Simply take a picture of your card in Apple’s ‘Passbook’ to automatically enter your card details, or enter them manually.

You then add any security details and your card is stored. Just like your actual wallet you can add multiple cards to your Passbook, so you can pay with different cards on the same phone.

The technology works just like contactless payment once your card is added. Apple pay proposes to do the same thing, but with your phone

Just hold you iPhone over the contactless reader and press your finger to activate Apple’s ‘touch id’, which authorises the payment using your fingerprint.

Where can I use ApplePay?

ApplePay works exactly like a contactless payment card, but as you have to use your thumb print to open the app, there’s no limit as this is considered as good as entering your PIN.

You can use ApplePay on at contactless payment terminals (there are currently an estimated 250,000+ of these in the UK) as you would with any contactless payment card.

But Apple have highlighted some key retailers that will accept payment with the app (see below).

This means that older card machines that only use chip and pin won’t be able to accept Apple Pay.

Security concerns

The major concern for Apple Pay is security, particularly with recent reports from the US stating that there has been a high level of fraud in the US since its launch.

The fraud being committed in America is not a hack of Apple Pay’s encryption. Rather they are registering stolen personal information and getting Apple to set up a victim’s card on the criminal’s iPhone.

Apple’s security system works by giving each card you add a Device Account Number, which is encrypted and added to the chip on your phone.

This account number, along with a security code issued for each purchase, is then used to authorise each payment.

Benefits of Apple Pay

The main selling point of Apple Pay is simply convenience. By registering your cards on your iPhone Apple hopes to eliminate the need of carrying a wallet around with you, and ultimately, of carrying cash.

That could also mean greater security as you don’t have to worry about losing your wallet and even if your phone is stole, Apple’s fingerprint ID system should stop criminals from using Apple Pay on your phone.

Alternatives to Apple Pay

The major alternatives to Apple Pay are Google Wallet, launched in 2011 to moderate success, and contactless payment, widely available on credit and debit cards.

There are no official numbers on how many sign-ups Google Wallet has had, but it is thought Apple Pay is already more successful in the states.

As of March 2015 US bank JP Morgan Chase said it had over 1 million Apple Pay customers, while Bank of America reported 1.1m cards had been added by the end of 2014

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