Apple Announces 'Apple Pay' Mobile Payment Solution, Enabled at Over 220,000 U.S. Merchants

[skellener]

I didn't see this mentioned anywhere. Will ApplePay for online shopping be available on the 5S? It has Touch ID and there's no need for the NFC chip if it's an online purchase. Eddie did mention another security chip though. I guess it may not work without that....unless it's just needed to work with NFC. Anyone hear anything more about it? ApplePay only on the 6 and up?

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So why would it be expected that Apple Pay will succeed, since it's the same infrastructure?

I'll bet some how Apple is paying to have the system installed at the major retailers. A guess anyway. Plus Apple has more users who will actually use the system. I'm curious how soon you will see it at supermarkets like Trader Joe's and gas stations. I'm not one who shops at malls or drinks Starbucks, but I do have to buy food and gas.

 

[wookiee2cu]

Apple did it correctly with getting deals with major credit card companies to waive fees. It was the fees merchants were getting socked with that made NFC not take off properly in the US.

Not sure they got the companies to waive fees I think it's the ones that were willing to allow Apple to collect a fee from banks every time consumers use the company's new Apple Pay payments solution. https://www.macrumors.com/2014/09/10/apple-collecting-bank-fee-apple-pay-purchase/

 

[BoxerGT2.5]

Not sure they got the companies to waive fees I think it's the ones that were willing to allow Apple to collect a fee from banks every time consumers use the company's new Apple Pay payments solution. https://www.macrumors.com/2014/09/10/apple-collecting-bank-fee-apple-pay-purchase/

Any fees either by the bank or apple will be paid for by the customer in one way shape or form.

 

[caesarp]

But Wallet will also be taking advantage of those.

How does this compare to Chip and Pin security wise?

Apple Pay is better. Chip and PIN requires a user PIN.

With Apple Pay there is a one time (dynamic security code) generated with each transaction. You don't need to remember it or create it. It is worthless after that one transaction.

The "fake" encrypted credit card number, AKA the unique Device Account Number (stored in the Secure Element chip on the iphone), is sent with the dynamic security code for payment authorization. Neither the merchant, nor Apple nor anyone else sees your credit card number, etc.

"With Apple Pay, instead of using your actual credit and debit card numbers when you add your card, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element, a dedicated chip in iPhone. These numbers are never stored on Apple servers. And when you make a purchase, the Device Account Number alongside a transaction-specific dynamic security code is used to process your payment. So your actual credit or debit card numbers are never shared with merchants or transmitted with payment."
​

This is a game-changer and Apple needs to explain this better so people are not scared to use it. This is great. And because Apple has already partnered with major card brands, card issuers and retailers, it should gain acceptance way faster than other mobile payment systems in other phones, etc.

 

[kdarling]

I didn't see this mentioned anywhere. Will ApplePay for online shopping be available on the 5S? It has Touch ID and there's no need for the NFC chip if it's an online purchase. Eddie did mention another security chip though. I guess it may not work without that....unless it's just needed to work with NFC. Anyone hear anything more about it? ApplePay only on the 6 and up?

Apple is not clear about where their NFC Secure Element is.

(An NFC Secure Element is a place for applications and storage that can only be accessed via strictly controlled commands. It runs the code that signs purchase requests, using the Device Account Number that is also stored only there. The idea is that NO outside process can directly access that info.)

Usually the SE is in the SIM or the NFC chip itself. But it could be in the main CPU's Secure Enclave, although that's considered less secure.

A big clue to me is that Apple is involved with First Data, who is a TSM (Trusted Service Manager), which is what you need to install code into an NFC Secure Element. (They're who Google Wallet used in its first version which also used a special onboard SE.) This implies that it's using the SE on the NFC chip. But maybe not.

The upshot is, we don't know enough yet. I'd like to know which NFC chip from NXP that Apple is using, and see if it has an SE onboard.

TL;DR -if Apple is using the SE on the NFC chip, then it's iPhone 6 specific. If they're using their own cpu's enclave, then of course older phones could do online payments. So the question is: do they want to skim more money from more transactions from more users, or do they want to get more people to move to the latest model.

 

[caesarp]

So why would it be expected that Apple Pay will succeed, since it's the same infrastructure?

Because Apple Pay has already partnered with the major credit card brands, banks and retailers. Google didn't do that in advance to such depth. So, out of the box, Apple Pay should work in many more places than Google Wallet.

Apple realized you can't release a mobile payment system that isn't ready to be used by everyone in the stream -- cards; banks; payment processors and retailers. Google didn't take care of that. Apple seems to have done that.

And with the momentum, it will only be a matter of time where its virtually universal in the U.S. for any purchase, like a visa or mastercard.

----------

Apple is not clear about where their NFC Secure Element is.

(An NFC Secure Element is a place for applications and storage that can only be accessed via strictly controlled commands. It runs the code that signs purchase requests, using the Device Account Number that is also stored only there. The idea is that NO outside process can directly access that info.)

Usually the SE is in the SIM or the NFC chip itself. But it could be in the main CPU's Secure Enclave, although that's considered less secure.

A big clue to me is that Apple is involved with First Data, who is a TSM (Trusted Service Manager), which is what you need to install code into an NFC Secure Element. (They're who Google Wallet used in its first version which also used a special onboard SE.) This implies that it's using the SE on the NFC chip. But maybe not.

The upshot is, we don't know enough yet. I'd like to know which NFC chip from NXP that Apple is using, and see if it has an SE onboard.

TL;DR -if Apple is using the SE on the NFC chip, then it's iPhone 6 specific. If they're using their own cpu's enclave, then of course older phones could do online payments. So the question is: do they want to skim more money from more transactions from more users, or do they want to get more people to move to the latest model.

Its on a separate chip on the board. No mystery.

"Built as a chip and only available in the iPhone 6 and iPhone 6 Plus, the secure element is where your financial information is stored. It is only accessed when a random 16-digit number must be generated for a transaction. The data stored on the secure element never makes their way onto your phone's software, so even if someone hacked your operating system, there would be no way to extract your financial information.

The secure element found in the iPhones are also safe from hardware attacks. In fact, if a thief dismantled your phone, the secure element would sense tampering and immediately shut down.

This, in addition to NFC, is also why previous versions of the iPhone can not be made compatible with Apple Pay."

http://www.cnet.com/how-to/apple-pay-how-it-works-security/

 

[hoofhrtd1254]

Because Apple Pay has already partnered with the major credit card brands, banks and retailers. Google didn't do that in advance to such depth. So, out of the box, Apple Pay should work in many more places than Google Wallet.

Apple realized you can't release a mobile payment system that isn't ready to be used by everyone in the stream -- cards; banks; payment processors and retailers. Google didn't take care of that. Apple seems to have done that.

And with the momentum, it will only be a matter of time where its virtually universal in the U.S. for any purchase, like a visa or mastercard.

----------



Its on a separate chip on the board. No mystery.

"Built as a chip and only available in the iPhone 6 and iPhone 6 Plus, the secure element is where your financial information is stored. It is only accessed when a random 16-digit number must be generated for a transaction. The data stored on the secure element never makes their way onto your phone's software, so even if someone hacked your operating system, there would be no way to extract your financial information.

The secure element found in the iPhones are also safe from hardware attacks. In fact, if a thief dismantled your phone, the secure element would sense tampering and immediately shut down.

This, in addition to NFC, is also why previous versions of the iPhone can not be made compatible with Apple Pay."

http://www.cnet.com/how-to/apple-pay-how-it-works-security/

I don't believe this is the issue as it is an NFC transaction and both "wallets" use NFC to process the payment so they should work at the exact same locations. I don't believe there is as much specification behind the merchant NFC to allow or block certain "wallets" whereas there is just an on/off switch. I couldbe wrong though. I've been able to add all of my various cards to my Google Wallet and they've worked anywhere I've tried to use it that had NFC and had it turned on. Walgreens for the longest time had it but it wasn't turned on. Android uses the same concept where you need the secure element along with NFC.

 

[caesarp]

I don't believe this is the issue as it is an NFC transaction and both "wallets" use NFC to process the payment so they should work at the exact same locations. I don't believe there is as much specification behind the merchant NFC to allow or block certain "wallets" whereas there is just an on/off switch. I couldbe wrong though. I've been able to add all of my various cards to my Google Wallet and they've worked anywhere I've tried to use it that had NFC and had it turned on. Walgreens for the longest time had it but it wasn't turned on. Android uses the same concept where you need the secure element along with NFC.

I think the answer is that Wallet may eventually work at MORE locations, due to Apple getting so many major players involved. Yes, Apple Pay should work where Google works -- but now they BOTH may be able to work in way more places.

Apple Pay has partnered with Visa, MC and Amex, plus banks plus payment processors. That's the big difference. Don't mix up hardware capability at the retailer with the card brands; issuing banks and payment processors. There's a lot of players in a credit card transaction.

The issue is NOT just NFC. That's just how the data gets to the payment authorization processor. But you still need all the other players in line. You are focusing just on NFC, which isn't the issue. Its all the other pieces.

 

[kdarling]

With Apple Pay there is a one time (dynamic security code) generated with each transaction. You don't need to remember it or create it. It is worthless after that one transaction.

A dynamic CVV has been used by contactless cards for many years. Even most of the old RFID ones do it.

The "fake" encrypted credit card number, AKA the unique Device Account Number (stored in the Secure Element chip on the iphone), is sent with the dynamic security code for payment authorization. Neither the merchant, nor Apple nor anyone else sees your credit card number, etc.

Again, not a unique or new idea.

This is a game-changer and Apple needs to explain this better so people are not scared to use it. This is great. And because Apple has already partnered with major card brands, card issuers and retailers, it should gain acceptance way faster than other mobile payment systems in other phones, etc.

This reminds me of when people claimed Apple invented multi-touch.

Apple chose one good way to implement it, but you're just repeating marketing hype without understanding the history of NFC payments.

Because Apple Pay has already partnered with the major credit card brands, banks and retailers. Google didn't do that in advance to such depth. So, out of the box, Apple Pay should work in many more places than Google Wallet.

True, if a place only accepted AMEX or their own card, for example, and not MC or Visa. Are there "many more" places like that?

And of course, if a store only took Discover, both payment methods are out of luck. But I don't think that's a major biggie, either.

Apple realized you can't release a mobile payment system that isn't ready to be used by everyone in the stream -- cards; banks; payment processors and retailers. Google didn't take care of that. Apple seems to have done that.

You do know that Google Wallet works anywhere that takes Mastercard, or Visa Paywave?

And then charges it to any kind of credit or debit or gift card you have registered.

And with the momentum, it will only be a matter of time where its virtually universal in the U.S. for any purchase, like a visa or mastercard.

They already are, as long as the merchant has a working reader.

Its on a separate chip on the board. No mystery.

Thanks, that confirms my earlier predictions on the topic.

 

[hoofhrtd1254]

I think the answer is that Wallet may eventually work at MORE locations, due to Apple getting so many major players involved. Yes, Apple Pay should work where Google works -- but now they BOTH may be able to work in way more places.

Apple Pay has partnered with Visa, MC and Amex, plus banks plus payment processors. That's the big difference. Don't mix up hardware capability at the retailer with the card brands; issuing banks and payment processors. There's a lot of players in a credit card transaction.

The issue is NOT just NFC. That's just how the data gets to the payment authorization processor. But you still need all the other players in line. You are focusing just on NFC, which isn't the issue. Its all the other pieces.

Actually, that is the issue. Apple said that soon/now ApplePay will rollout to McDonald's, Walgreens etc. if that's the case Google Wallet has the leg up because it already works at those locations.

So you're saying that a location that accepts ApplePay via NFC could potentially not accept/block Goggle Wallet via NFC and vice versa?

I'm pretty sure the ApplePay partnership is to allow Passbook to load the different types of cards. It isn't too install anything magical on the merchant side unless it is for loyalty programs.

 

[AllieNeko]

Because Apple Pay has already partnered with the major credit card brands, banks and retailers. Google didn't do that in advance to such depth. So, out of the box, Apple Pay should work in many more places than Google Wallet.

Apple realized you can't release a mobile payment system that isn't ready to be used by everyone in the stream -- cards; banks; payment processors and retailers. Google didn't take care of that. Apple seems to have done that.

And with the momentum, it will only be a matter of time where its virtually universal in the U.S. for any purchase, like a visa or mastercard.

What are you talking about? Google Wallet and Apple Pay will work at all the EXACT same places!

 

[caesarp]

A dynamic CVV has been used by contactless cards for many years. Even most of the old RFID ones do it.



Again, not a unique or new idea.



This reminds me of when people claimed Apple invented multi-touch.

Apple chose one good way to implement it, but you're just repeating marketing hype without understanding the history of NFC payments.



True, if a place only accepted AMEX or their own card, for example, and not MC or Visa. Are there "many more" places like that?



You do know that Google Wallet works anywhere that takes Mastercard, or Visa Paywave?



Yeah, like that.



Thanks, that confirms my earlier predictions on the topic.

Its not that Apple invented something new, its that they have made it more likely to be used (in the US) on a grand scale. (Which was not happening with Google Wallet and others). I don't know why everyone is hung up on whether something is "new" or not. The issue is whether it will be used. With the way Apple Pay is being implemented (and apparently NOT for Apple to track transactions or get more consumer data) and with Apple's muscle behind this, I expect mobile pay in all respects to get a big boost -- whether you use google wallet or apple pay. That's the point.

 

[caesarp]

Actually, that is the issue. Apple said that soon/now ApplePay will rollout to McDonald's, Walgreens etc. if that's the case Google Wallet has the leg up because it already works at those locations.

So you're saying that a location that accepts ApplePay via NFC could potentially not accept/block Goggle Wallet via NFC and vice versa?

I'm pretty sure the ApplePay partnership is to allow Passbook to load the different types of cards. It isn't too install anything magical on the merchant side unless it is for loyalty programs.

Wouldn't the payment processors have to accept the Apple generated token and dynamic security code? Isn't that why payment processors have to be on board too (not just the merchant with NFC equipment).

 

[Trapezoid]

Its not that Apple invented something new, its that they have made it more likely to be used (in the US) on a grand scale. (Which was not happening with Google Wallet and others). I don't know why everyone is hung up on whether something is "new" or not. The issue is whether it will be used. With the way Apple Pay is being implemented (and apparently NOT for Apple to track transactions or get more consumer data) and with Apple's muscle behind this, I expect mobile pay in all respects to get a big boost -- whether you use google wallet or apple pay. That's the point.

They're hung up on whether its new or not because they know it will be used, and not just in the USA, everywhere. Don't believe the anecdotes from posters here that everyone is using nfc everywhere except the US. Its not true without any proof.

Harping about whether its new or not is just a way to detract from the fact that apple is about to change another facet of daily life again.

 

[caesarp]

Actually, that is the issue. Apple said that soon/now ApplePay will rollout to McDonald's, Walgreens etc. if that's the case Google Wallet has the leg up because it already works at those locations.

So you're saying that a location that accepts ApplePay via NFC could potentially not accept/block Goggle Wallet via NFC and vice versa?

I'm pretty sure the ApplePay partnership is to allow Passbook to load the different types of cards. It isn't too install anything magical on the merchant side unless it is for loyalty programs.

NO. I'm saying with the momentum of Apple behind mobile payments now, ALL mobile payments should be accepted at more and more places going forward.

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They're hung up on whether its new or not because they know it will be used, and not just in the USA, everywhere. Don't believe the anecdotes from posters here that everyone is using nfc everywhere except the US. Its not true without any proof.

Harping about whether its new or not is just a way to detract from the fact that apple is about to change another facet of daily life again.

Actually I believe NFC is very popular in Europe and Asia. Just not in the U.S. But the U.S. is a huge market and Apple is smart to focus on that now for mobile payment.

 

[Trapezoid]

Actually I believe NFC is very popular in Europe and Asia. Just not in the U.S. But the U.S. is a huge market and Apple is smart to focus on that now for mobile payment.

We all "believe" that because ppl from other countries who post here say that non-stop. But I can't find anything anywhere that indicates its true.

I've asked countless times here for some source saying how popular it is and no one provides one. I chalk it up to irrelevant anecdotes.

 

[hoofhrtd1254]

NO. I'm saying with the momentum of Apple behind mobile payments now, ALL mobile payments should be accepted at more and more places going forward.

Oh, yeah...I agree with you on that and am glad Apple has added it because now more merchants will upgrade their terminals because of that and having to upgrade to accept EMV.

 

[AllieNeko]

We all "believe" that because from other countries who post here say that non-stop. But I can't find anything anywhere that indicates its true.

I've asked countless times here for some source saying how popular it is and no one provides one. I chalk it up to irrelevant anecdotes.

I can tell you for the UK because I spend a good amount of time there still... it's... accepted a lot more places. I wouldn't go so far to say it is POPULAR, but people at least know what it is and use it sometimes. Popular is probably a bit too much of a stretch.

 

[Trapezoid]

I can tell you for the UK because I spend a good amount of time there still... it's... accepted a lot more places. I wouldn't go so far to say it is POPULAR, but people at least know what it is and use it sometimes. Popular is probably a bit too much of a stretch.

Oh absolutely, I'm definitely not saying it's not used. Heck it's used sometimes in the US too and its accepted everywhere in the US.

It's just that we keep hearing how everyone in the world is using it, and how the US is so backwards but there's no proof of that. When I Google "how popular is nfc" all I get back are stories about how UNPOPULAR it is.

Its hard to believe that it's so widespread it is everywhere and all we have is anecdotes on forums.

NFCs popularity overseas is sounding more and more like an urban legend. You "heard" from so and so that it's used everywhere. Not buying it without a source.

 

[poppy10]

We all "believe" that because ppl from other countries who post here say that non-stop. But I can't find anything anywhere that indicates its true..

Surely the fact that so many people are saying it is evidence in itself.I'm in the UK and use contactless payments more often than standard chip+pin transactions. I buy my Starbucks coffee, do my grocery shopping and pay for my travel with a swipe of my card or phone.

However, if you want some hard figures, try this:

Consumers made almost 20 million (19.7 million) contactless transactions across the UK in May 2014, an 18% increase on April 2014 alone. More than 37.8 million contactless cards have now been issued by UK banks, a 35% increase on the same period last year.

May 2014 also set a new record for the total value of transactions made by contactless cards in the UK in a single month, reaching £126.7 million, a 14% increase on April 2014. This also indicates a growth of 189% since May 2013.

The average UK transaction value for contactless cards in May 2014 was £6.43. This figure represents a 34 pence per transaction increase since May 2013, where contactless payments averaged £6.09 per transaction.

Visa Europe’s data also shows that in addition to increased usage by consumers and greater issuing of contactless cards from banks, the UK’s top 30 retailers are helping to drive use of the payment method. The top 30 retailers accounted for 67% of all contactless payments in May 2014.
- See more at: http://www.visaeurope.com/en/newsro...less_payments_surge.aspx#sthash.WS9ImtDT.dpuf

 

[AllieNeko]

Oh absolutely, I'm definitely not saying it's not used. Heck it's used sometimes in the US too and its accepted everywhere in the US.

It's just that we keep hearing how everyone in the world is using it, and how the US is so backwards but there's no proof of that. When I Google "how popular is nfc" all I get back are stories about how UNPOPULAR it is.

Its hard to believe that it's so widespread it is everywhere and all we have is anecdotes on forums.

NFCs popularity overseas is sounding more and more like an urban legend. You "heard" from so and so that it's used everywhere. Not buying it without a source.

It isn't anywhere near as widely accepted in the US compared to Canada or the UK. The region of the US I'm in only has a few places vs maybe half in Canada/UK.

 

[Trapezoid]

Surely the fact that so many people are saying it is evidence in itself.I'm in the UK and use contactless payments more often than standard chip+pin transactions. I buy my Starbucks coffee, do my grocery shopping and pay for my travel with a swipe of my card or phone.

However, if you want some hard figures, try this:

Thank you! This is really all I was asking for!

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It isn't anywhere near as widely accepted in the US compared to Canada or the UK. The region of the US I'm in only has a few places vs maybe half in Canada/UK.

Yeah I'm talking major metro areas but I'm sure that's the same in Canada and the UK. it's going to be less available in smaller towns.

That being said someone posted a source showing that it is actually being used much more in Europe, so I take back my argument.

Apple pay will definitely become the most popular method of nfc payment but at least I know now that it actually is growing and not just anecdotes.

 

[linuxcooldude]

It's just that we keep hearing how everyone in the world is using it, and how the US is so backwards but there's no proof of that. When I Google "how popular is nfc" all I get back are stories about how UNPOPULAR it is.

I could probably count on one hand where I've heard the countries where it is widely used every day. Every time I hear which countries have it is always the same ones...Japan, UK, Australia, Korea...anywhere else?

That being said someone posted a source showing that it is actually being used much more in Europe, so I take back my argument.

Some people count the UK as all of Europe just because they live there and use it everyday.

 

[1Zach1]

I feel like I read somewhere (on here I think, but I can't find it) that the new VeriPhone POS terminals that merchants are upgrading to for EMV compliance are NFC equipped, but most aren't enabled. I have seen them popping up at Target, Trader Joes, even UPS stores. I am not sure if that was accurate, but it makes me wonder if retailers are going to be switching on the NFC modules now that ApplePay is around.

 

[kdarling]

@Trapezoid:

Last year, about 1/3 of smartphones sold had NFC. That's 300 million phones. For 2014 they predict 550 million.

That said, right now, I think that you are right that NFC payments are a mere fraction of what they could be. (See 2017 prediction in the chart above.)

It's a matter of reaching critical mass in both phones and merchants, and clearing the roadblocks that various competing groups have thrown up.

I feel like I read somewhere (on here I think, but I can't find it) that the new VeriPhone POS terminals that merchants are upgrading to for EVM compliance are NFC equipped, but most aren't enabled. I have seen them popping up at Target, Trader Joes, even UPS stores. I am not sure if that was accurate, but it makes me wonder if retailers are going to be switching on the NFC modules now that ApplePay is around.

They'd be turned on next year anyway. Part of Visa and Mastercard's ultimatum to merchants about liability, was that they had to support NFC payments.

Again, this is why Apple is jumping on the bandwagon now. Yes, that will hopefully make the merchants turn them on quicker by six months, and make more users aware of what they can do, which is great.