If you’re an Apple user, you likely noticed the recent buzz about Apple Pay which is based on the new contactless payment method NFC that’s already swept through Asia and Europe. While the technology is rock stable, the Apple implementation of a payment method that you just swipe your phone is still too new to call. However, it does promise greater ease and transaction security than reaching into your wallet for credit cards or bills.
The process is simple. You begin by placing your thumb over your device’s home button, then scan your phone in front of the payment terminal. So far the functionality is available with the new iPhone 6 and 6 Plus. In early 2015 we will see the addition of the Apple Watch to the product mix. You will also be able to use Apple Pay with the iPad Air 2 or iPad mini 3, but that will only work within apps and not at a merchant terminal.
So as a consumer, does this new “mobile wallet” really benefit you? Probably.
For one thing, security should significantly increase with the adoption of near field communication which is contactless communication between a device and a payment terminal. This technology eliminates the need for the merchant to receive your credit or debit card information, which in turn reduces the possibility that they can lose or take advantage of it, or that hackers can steal it from them.
For another, the transaction process is likely to be much quicker than those you’re used to. Instead of pulling out a card, paying, signing and receiving a receipt (or not), you can simply swipe your phone in front of a payment terminal and be done. Merchants can still offer you a receipt to keep track of your transactions, but Apple assigns every payment a unique transaction ID and sends the user an immediate notification.
Some merchants may still opt to print a receipt, which could increase the transaction time or increase paper. We believe that the green merchants will let you swipe then deliver your receipt via email. Additionally, payment terminals and point-of-sale systems don’t yet widely allow for electronic receipts, so if you want one, it will probably be paper until more merchants switch to smarter processing equipment.
For now, Apple recommends limiting transactions to credit wherever possible, as debit may prove more troublesome with older technology or outdated backend systems.
Because the technology is still in its infancy (in the United States, at least), many merchants aren’t yet equipped to accept payments through this system. Even those that are might not be set up correctly, resulting in failed payments or repeat charges that you’ll have to clear off your account later. Plus early reports indicate that the actual experience of swiping the phone over a payment terminal while holding a finger on the home button is, well, weird. But in the long run it’s a minor inconvenience.
Overall, small annoyances will likely be the order of the day, but no one is predicting actual security risks. With this in mind, Apple Pay should settle into its place on the economic scene fairly quickly and, once the kinks are worked out, result in a user-friendly, safe and fast experience for you.
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