TidBITS:
With Apple Pay, Apple’s self-described mission is to replace your wallet, enabling you to pay a bill by holding an iPhone 6 or 6 Plus, or the forthcoming Apple Watch, up to a payment sensor. No more fumbling with credit cards and signing receipts, or worrying about having enough cash. In theory, at least, Apple Pay both improves the payment experience and brings new levels of security and privacy to credit card payments.
Adam makes a very good point about wallets, too. This won’t replace it for most of us because we need to carry around other cards as well. But it’s a step towards an interesting future.
My question has always been, is using a credit card really all that difficult for most people that they need and want this kind of replacement?
I know I’ve worn out my share of plastic cards. But I don’t see this as simply a matter of convenience.
Security is the biggest win here. This system prevents stores from storing anything that could be reused by a fraudster. Instead of card numbers, a one time code that can’t be reused.
Also, thing of the amount of waste that can be reduced in the long run. No more plastic cards to mail or dispose.
“My question has always been, is using a credit card really all that difficult for most people that they need and want this kind of replacement?”
It’s less about that.
In true Apple style, it’s about reducing/eliminating the “paper cuts.” Almost everything Apple has done gets derided as having been “done before.” Their skill is in refining an existing experience to make it as seamless as possible.
Now I don’t know about you, but my wallet is pretty fat with a bunch of different bank cards, loyalty cards, etc. in it. If I could reduce those by even just half it’d be a big win.
Then there are other benefits, like biometric authentication using TouchID, single-use tokens for security (obviating things like the Target credit card breach), and having all your receipts in one digital place, rather than on multiple slips of paper (which you might shove into your wallet if you need to keep them for things like expense reports, making it even fatter…).
Besides all that, it’s an integration play with the Apple Watch. Payments and authentication were logical features for the watch, so it’s also logical to to put those on the new iPhones at the same time.
I want to get rid of my wallet. Each and every card I can turn digital I’m doing it. About the only thing that remains is a drivers license.
Not having to show a credit card is better security. That is a giant improvement.
Exactly.
I think commenters are right. this is as much about security as it is about reducing the thickness of one’s wallet. For those who bought into COIN are now probably regretting doing so. But then it runs out in a year, and those of us on the 5s are not likely to get a 6.
I’ll have to check Adam’s post to see if the Watch needs an iPhone 6 to do mobile payments. If not, I’m on that one the second they go on order!
Apple Watch can do mobile payments when paired with iPhone 5, 5c, 5s, 6, or 6 Plus.
You’re good to go!
(Note Apple Watch provides “pseudo Touch ID.” Enter a PIN once when you put it on, & it’ll provide authentication until you take it off.)
I’m with the rest as far as the idea that the fewer cards that I can carry, the better.
I already have my wallet down to about a quarter inch thick as it is. Unfortunately, it’s not going to be ubiquitous any time soon, so I’d still be left with having to carry the card as backup. Also, I’m not in any hurry to replace my iPhone 5. If there was some way of making it backward compatible, that’d be great.
If it was integrated into passbook somehow, that would be the best fit for me.
It is more that it makes stealing your info harder for me.
It’s about lowering barriers to try new (online) vendors, lowering barriers to impulse shopping, and also about security (one-time hashes).
The security feature alone is significant (cue Europeans chiming in about how their cards have had this feature for ages), and the timing of the Target and Home Depot breaches earlier this year speak to that.
Plus, it’s another way for me to leave more cards at home, and just keep one with me for emergencies.
” I don’t know about you, but my wallet is pretty fat with a bunch of different bank cards”
I’m poor so I only have a debit card….
“No more plastic cards to mail or dispose.”
Not true. CC companies will still need/want to send you a CC card.
Here in Europe payment with credit cards is a lot easier and faster. All current cards are chip-based. Payment consists of three steps: insert CC in the reader; type your 4-digit PIN, press OK and wait confirmation (one or two seconds); remove CC from the card reader. One additional step: wait for the clerk to print the ticket.
In fact, new credit cards also are capable of NFC payments, but usually limited to payments up to 20€. Not all shops are equipped with NFC terminals, though.
Ask the 60M Home Depot shoppers if they’d like to give up using credit cards and use a one-time token instead…..
In the short term, sure. But in the long run, what would the point of issuing everyone card if the majority of people are using their phones (iPhone or otherwise, the competition probably won’t be standing still) and the majority of vendors accept payment over phones?
The CC companies are pushing security right now. Eliminating cards and replacing it with a one timecode for the vast majority of cases removes the weakest link.
Would this happen in the short term? Nope, but as I said, in the long run.
Is it really disrupting the payment industry when Apple has to use the major creditcard companies to do so? It seems like it’s the kickstart to what the payment industry needed to adopt more secure practices, but the entire backend is still the same ol’ pipe with the same parasites sucking the money right out of your wallet.
Like everyone else here has said: it’s about security. I’m probably an outlier, but I’ve had 4 incidents in the past couple of years where my card info was compromised – Target, Heartland, BMW Mastercard, and now Home Depot. Credit card security is a HUGE deal.
The Apple Watch will not work without the iPhone. Since the iP6 will be the only Apple device to support NFC (for now), well, you can extrapolate from there.
I only have a debit card. And a drivers license. And a medicare card (I come from Australia, a clearly Communist country because we have socialised healthcare). And my office’s RFID passes.
They all live in my iPhone case. Why? Because I carry my iPhone everywhere.
The main concern of mine that the Apple Pay system resolves is that RFID cards are pretty much “always on”. Combining the NFC with Touch ID means I am in (more) control over when the NFC payment can be done. No longer can someone siphon money by simply prowling around with a PayWave station and a directional antenna.
“The Apple Watch will not work without the iPhone.”
Not true. It will have limited functionality away from an iPhone but it will still “work”.
“They all live in my iPhone case. Why? Because I carry my iPhone everywhere.”
I love(d) my Distil Union Wally Case – until I lost it twice.
Losing an iPhone wallet case means not only do you lose your iPhone, you lose your credit cards, debit cards, business cards, money, driver’s license, health card (Canada so I live in a “clearly Communist country” too 🙂 )etc., etc., etc….
I’ve gone back to a regular wallet…
OK, sure, it’ll still “work”, just like my remote key-less entry key-fob still works when I’m not near my car. I can press the buttons, the light comes on, it sends out a radio signal, but it’s basically useless.
Within the context of the original comment, where Hrunga Zmuda says “I’ll have to check Adam’s post to see if the Watch needs an iPhone 6 to do mobile payments.” then no, the Apple Watch will not work without the iPhone.
iPhone 6 / 6 Plus: very nice, will pre-order a 6 ASAP.
Apple Watch: surprising, more than I expected.
Apple Pay: game changer, will revolutionize mobile purchase.
I think Apple Pay is the biggest news. And it will have the most far-reaching effect on modern culture. As Daniel Bergquist said earlier, “Security is the biggest win here.” Looking forward to using Apple Pay. Everywhere.
Will be interesting to see if / when / how banks roll out Apple Pay-enabled ATMs. I’d like to get rid of my ATM / debit card as well as my credit cards. I’d hate to have to carry around that one card after I’ve shed (shredded?) the rest.
Ouch. Sorry to hear that. But yeah, I knew there was a reason why I only pay cash at Target and Home Depot…
From the end-user perspective, yes, it’s a total and complete disruption. You won’t ever need to use your physical credit card or your account number. Transactions will be handled by single-use tokens that are invalid after the transaction has been completed. So, even if the token data is intercepted, it will be useless to any would-be criminal.
I’m all for cutting down on the number of cards I need to carry. But I’m not afraid of carrying around wads of cash. (I used to play a lot more poker than I do now.)
I feel your pain! For me the problem was leaving my office passes at home. So I put them in my phone case, now I never forget them (except when I forget my phone, and I’ll be half way to work and realise I have no music).
I have a travel wallet with all my cards and passport in it, but I don’t carry that with me since I rarely use any of the contents. There are only a couple of cards in my iPhone case, which are the ones I use the most (office cards, debit card) and the ones I’m most likely to need in an emergency (Medicare card and drivers license).
Bellroy ads keep popping up in my feed, so chances are I’ll end up buying one when I get the iPhone 6 (upgrading from an iPhone 4). I’m not sure I have room in any of my pockets for such a large device in a case.
Good thing the major target market for iPhones are affluent people, who tend to have multiple cards. 😉
I agree that it is a new and innovative way to make payments, but disruptive? Who is it disrupting? Which companies are Apple going after? The makers of little plastic cards with a mag stripe? (and by maker I mean the actual manufacturer of plastic cards)
I think you’re missing the real benefit, convenience is the selling point, but the true benefit is security (IMHO)
Within the context of the OP, he was asking whether it would allow him to use the Apple Watch to make payments when he’s still using an iPhone 5s, or whether that requires an iPhone 6. Turns out it’ll work with an iPhone 5s for this just fine.
Beyond that, it will have other stand-alone functionality, such as playing music (presumably through a yet-to-be-announced BlueTooth headset), fitness tracking, and of course, telling the time. 🙂
The Apple Watch also stores account details in its own onboard “Secure Element,” so presumably it’ll actually work as a stand-alone device to make payments, and an iPhone is only needed to set it up with your initial card information.
by running it break-even, it’s “disrupting” Apple’s competitors who have been trying to make money off of mobile payment systems for a while. 🙂
Remember last month when Shawn said on Amplified: “I mean NFC is rumoured to be in the next iPhone. I can tell you right now NFC is not going to be in the next iPhone. I promise you that.”
I managed a store for a decade and we hired someone who seemed trustworthy, but he was recording customer credit card numbers and using them.
I’ve given into the inevitability of my card getting misused in this and many other ways. Just a matter of time now. We need an alternative. Make it so Apple.
Horace Dediu would take issue with the use of the word disrupt. Value is not being take from an incumbent by an entrant.
It could be that I simply just don’t know what I’m talking about. I was under the impression that the NFC radio only resided in the iPhone 6. Does the Apple Watch also have an NFC radio?
Apple Pay may not be disruptive in the sense that Amex, Visa, and MC are still the big players. However, consider your plastic credit card in your wallet, and the current payment system as a whole, as the incumbent. The value of carrying that card is certainly being diminished. Hopefully, this is the kick that our current system – which is so obviously broken – needs to make the switch to a more secure method of payment.
Yup. I was wrong. It happens. Already mea culpa’ed on Twitter.
At least I step up and admit when I’m wrong. Go check the rumour sites and see how many of them stand up and admit where they messed up.
LOL Oh, I fully admit I am not Apple’s target market for this stuff. 🙂
Now that’s classy. Much respect, sir.
I don’t know. Less “classy” and more “it’s the way things are supposed to be done”.
“My question has always been, is using a credit card really all that difficult for most people that they need and want this kind of replacement?”
Have you ever been in a checkout line before? It is obviously very difficult for some people.
SO MANY people cannot use a simple credit card machine. They don’t read what’s on the screen, they swipe the card with the magnetic stripe facing the wrong direction (despite there being a little picture showing them the right way), and then say stuff like, “Ugh, why are they all different?!?! Why can’t they make them all the same?!?!” as they stare blankly at the machine.
Excellent!
I think they are right. NFC must be built into the device itself if it can use the wallet functionality with the 5s. That’s all I need to know to buy one.
All the others who have tried (Paypal, Amazon, Google…and failed. That’s who it’s disrupting.
I just went to Apple’s website and it says you just hold the watch next to the pay terminal and you get a confirmation that the card stored on the watch is used. So no need to have a phone at all on you when you pay. The watch can do it itself.
I’m sure your Apple Watch will notify you anytime you leave your iPhone somewhere, making it much harder to lose!
There would be benefit for both the customer and the retailer for speeding up the checkout process. The video of the credit card user was not far off from the average transaction. If the Apple Pay video is the average Apple Pay transaction, I’m all over it.
Besides, I have so many different cards, fighting with my wallet to surrender the correct one can take a full minute on its own.
But it’s using standard NFC technology. It may be using iOS specific software for the UI and be able to push payment tokenization since it will soon have the largest active install base in the world, but all of Apple’s competitors can capitalize on the kickstart of NFC as well. It’s not like iTunes or the App Store where competitors are locked out and have to create their own solution.
dont knock them for that — it’s a valid UX perspective. why shouldn’t all the machines operate in the same fashion? another example of inconsistency — (some) machines telling you to swipe ahead of time while the cashier scans your items, and then cashiers chastising users for swiping too soon and to wait until they’re finished.
it’s on the creator of these systems to make it user-proof, not the other way round. Software 101, guy.
Very smart these Apple guys.
You may be sure of it but Apple hasn’t mentioned any kind of functionality like that.
Love it. They showed the best possible scenario (only using one card) in the demo but it’s very clear to be an industry change.
Best of all, this will only make Google Wallet accepted elsewhere as well. I see it quite often but with Apple entering the game those numbers will increase and, by extension, Android phones will instantly have better payment options.
The touchid integration is pretty sweet. The Watch integration (auth after the watch loses contact w/ your skin) is outright bonkers! That’s the level of quality I’ve come to expect from Apple and they nailed that part.
Don’t forget Target, which wasn’t quite the best option for the demo. Maybe it was though seeing as that’s the one failure everyone knew about. 🙂
What if the phone battery dies and you didn’t bring any cards or enough cash?
Same thing that happens now if you forget your wallet.
“DAMN YOU, APPLE!”
Hehe. 😀
I don’t think anyone will stop carrying a wallet. Apple Pay is not going to work everywhere anyway.
Sure enough. It’ll take awhile for this capability to percolate down to non-smartphone owners, if ever.
Yeah, for real. It will probably never get to them.
I know several that still blame any card/bank issues on their spouse using their info online. 😀
…angrily repeated while they enter their 12345 password on every banking site.
HAHAHAHAHAHA
See Home Depot and Target.