Apple Pay becomes available on October 20

Apple Pay enables customers to pay using Touch ID on iPhone 6 and iPhone 6 Plus in stores and within apps. Users of the just-announced iPad Air 2 and iPad mini 3 are set to be able to use Touch ID on their devices for Apple Pay within apps. The new service will be enabled by a free software update to iOS 8.

Apple Pay is designed to protect the user’s personal information. It doesn’t collect any transaction information that can be tied back to a user and payment transactions are between the user, the merchant and the user’s bank. Apple doesn’t collect one’s purchase history, so when users are shopping in a store or restaurant Apple doesn’t know what users bought, where they bought it or how much they paid for it. Actual card numbers are not stored on the device, instead, a unique Device Account Number is created, encrypted and stored in the secure element (SE) of the device. The Device Account Number in the secure element is walled off from iOS and not backed up to iCloud.

Apple Pay supports credit and debit cards from the three payment networks, American Express, MasterCard and Visa. In addition to American Express, Bank of America, Capital One Bank, Chase, Citi, Wells Fargo and others, who announced support in September 2014, more than 500 new banks from across the country have signed on to Apple Pay. 

To use Apple Pay in stores consumers have to hold their iPhone near the contactless reader while keeping a finger on Touch ID. In addition to the 262 Apple retail stores in the US, availability from retailers at launch include: Aéropostale, American Eagle Outfitters, Babies”R”Us, BJ’s Wholesale Club, Bloomingdale’s, Champs Sports, Chevron and Texaco retail stores including ExtraMile, Disney Store, Duane Reade, Footaction, Foot Locker, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Macy’s, McDonald’s, Nike, Office Depot, Panera Bread, Petco, RadioShack, RUN by Foot Locker, SIX:02, Sports Authority, SUBWAY, Toys”R”Us, Unleashed by Petco, Walgreens, Wegmans and Whole Foods Market. In addition, many others will add support this year, such as Anthropologie, Free People, Sephora, Staples, Urban Outfitters, Walt Disney Parks and Resorts and others.

The card number is kept private and not shared with the online merchant. Online shopping within apps allows users to pay for physical goods and services including apparel, electronics, health and beauty products, tickets and others. Apps with the ability to use Apple Pay at launch include: Apple Store app, Chairish, Fancy, Groupon, HotelTonight, Houzz, Instacart, Lyft, OpenTable, Panera Bread, Spring, Staples, Target and Uber. Many more are set to support Apple Pay by the end of 2014 with apps such as Airbnb, Disney Store, Eventbrite, JackThreads, Levi’s Stadium by VenueNext, Sephora, Starbucks, StubHub, Ticketmaster and Tickets.com, among others.

Payment solution providers and terminal suppliers such as Adyen, Authorize.Net, Bank of America Merchant Services, Braintree, CyberSource, Chase Paymentech, First Data, Heartland Payment Systems, iMobile3, NCR, Oracle’s Micros, Stripe, TSYS and VeriFone, among others, are working to bring merchants in stores and in apps the ability to easily, securely and privately accept payments using Apple Pay.

Apple Pay will be available in the US starting Monday, October 20 with iOS 8.1. For shopping in stores, Apple Pay will work with iPhone 6, iPhone 6 Plus and with Apple Watch, upon availability. For online shopping within apps, Apple Pay is available on iPhone 6, iPhone 6 Plus, iPad Air 2 and iPad mini 3. Users should contact their bank to determine their card’s eligibility, some banks may not support all card types. Apple Pay will be available in select retailers and apps in 2014.