Apple Pay enables customers to load credit and debit cards from participating banks into their iPhone 6 or iPhone 6 Plus, then hold the device about one inch from a special reader at a retail location to make payments.
There are about 220,000 retailers participating in Apple Pay, including companies such as Subway, McDonalds, Petco, Walgreens, Staples, Target, Starbucks, MLB.com and others.
While the large national banks such as Bank of America, US Bank and Wells Fargo are already offering Apple Pay, regional banks have been slower to adopt the new service. However, with the large banks and a number of major retailers already on board, regional banks will likely face increasing pressure from clients to adopt Apple Pay.
Under the current system of swiping a card for payment, the banking industry generates about USD 40 billion a year in swipe fees. The use of Apple Pay requires banks to share that revenue stream, but in return banks gain access to the technology-savvy Apple customers who like Apple Pay over using a card.
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