Apple Pay: What You Should Know about Apple's New Mobile Wallet System

Apple Pay, the new mobile wallet by Apple, is the latest and most talked about payment platform to hit the technology sector. Through Apple Pay, buyers can use the new iPhone 6, iPhone 6 Plus or Apple Watch to pay for items or services without reaching for a plastic credit card. By linking phones or smart watches with bank accounts, Apple Pay provides its users with a quick, easy and safe checkout system that may, in the future, compete with traditional methods of payment.

As a small business owner, how does this new launch by Apple affect you? Well for many years Apple has been a trendsetter in its own right, and its entry into the payments market is certainly going to make waves. As long as you are aware of Apple Pay’s following features and advantages, you might even stand to gain from its introduction in the business world.

Benefits of Easy, Contactless Payment

Through the near-field communication (NFC) chips embedded in iPhone6, iPhone6 Plus and Apple Watch, customers can hold their Apple devices up to a contactless point-of-sale device at a retailer for quick and easy payment. In case the Apple Pay system takes off, offering this facility to your customers could provide you with a competitive edge. In order to adopt Apple Pay, you might have to incorporate NFC readers into your checkout system, unless you already have an EMV-enabled payment terminal that can also handle NFC transactions. Apple Pay is backed by American Express, MasterCard, Visa and card issuing banks responsible for 83% of credit card transactions, while more than 220,000 merchants are ready to process credit-card transactions through this medium.

Provision of Increased Security and Privacy

Apple Pay provides several layers of security and also protects the privacy of the buyers. In order to use Apple Pay, consumers must first set up an account in Apple’s iTunes store with their payment card, either by entering the information manually or by clicking a photo of the debit or credit card with their iPhone. Once registered with Apple Pay, the next step is verifying the consumer’s account with the bank. While conducting transactions, the first layer of security comes from the new iPhone hardware itself. While checking out, buyers need to hold their finger over the Touch ID fingerprint reader embedded in their device’s home button for identification. This means that even if your phone is stolen, you needn’t worry. As long as the thief does not have the same fingerprints as you, your Apple Pay account remains quite safe! The second layer of the security comes from the fact that the NFC chip itself is designed to encrypt each user’s payment information, and Apple Pay uses a security code system to transmit a different code for each payment instead of transferring card data to the retail merchant. Users can also disable Apple Pay from their web browser at home if their phone is lost or stolen.

In the near future, retailers should be able to incorporate Apple Pay into online checkout systems on their websites or in dedicated business apps, thus eliminating the divide between online and offline shopping. However, a lot of Apple Pay’s success depends upon the terms and conditions that the Company is willing to offer to retailers. Small businesses may be unwilling to incorporate Apple Pay into their payment systems unless it is better than the charges that they receive for existing payment methods. Hence, whether this new wallet system manages to leave a mark in the mobile payment space or not is something that remains to be seen.