Apple unveils Apple Pay mobile wallet at iPhone launch event

September 9, 2014

For some people, the biggest attractions at today's Apple product launch event were the shiny new devices, like bigger iPhones and the long-anticipated Apple Watch. But for others, the big moment came about halfway through, when the company gave details on its new mobile wallet, Apple Pay.

CEO Tim Cook showed two videos: In the first, a woman tries to make a purchase in a store, fumbling with her wallet, watching as the store associate has to swipe the card multiple times, tucking away card and receipt when the transaction is finally complete. A few moments later, he showed a clip that was only a few seconds long — the same customer places her iPhone near an NFC terminal while resting her thumb on the phone's Touch ID reader, a picture of a Bank of America Visa card appears on the screen, a small chirping sound is heard, and the transaction is done. (He actually showed that video twice, "just in case you missed it.")

The company said that Apple Pay, which is set to launch in the U.S. in October, uses a secure element in the phone to store card information. It eliminates the need for a magstripe, a technology which Cook called "outdated and vulnerable," instead generating a single-use, unique number for each transaction. Privacy was emphasized. From the Apple live blog: "Apple doesn’t know what you bought, where you bought it, or how much you paid for it...Cashiers don’t see your name, your card number, or your security code." Customers can also transfer their existing payment information already stored in their iTunes account, and the whole payment platform is integrated with Passbook. Senior vice president of Internet Software and Services Eddy Cue said that Apple Pay will work with American Express, MasterCard and Visa, and will work at more than 220,000 merchant locations. Partnerships announced included Macy's, McDonald's, Disney, Walgreens, Subway, Whole Foods, and Staples.

Source: Mobile Payments Today