What is Apple Pay?

iPhoneApple Pay is a new way for customers to make payments with their credit and debit cards. Customers with the new iPhone 6 and iPhone 6 Plus are able to store their card information on their phone and make payments at participating retailers by touching their phones to a special point-of-sale terminal.

How does it work?

Apple Pay relies on a technology called Near Field Communications (NFC), also known as “contactless payments,” to allow consumers to make payments using their phones, without ever having to take their wallets out. A customer makes a payment by holding his or her phone up to the NFC terminal. Then, the customer touches a finger to the fingerprint reader installed on the iPhone in order to verify his or her identity. That’s it!

Who already accepts Apple Pay?

Many large retailers have started accepting Apple Pay. This group includes companies like McDonalds, Foot Locker, Subway, Office Depot, Whole Foods, Toys R Us and more.

Is Apple Pay secure?

Given all the data breaches that have been in the news recently, security is a major concern for many consumers. Fortunately, Apple Pay makes use of a number of security technologies.  In addition to the fingerprint requirement, Apple Pay uses “tokenization.” This means that every time a customer makes a payment through Apple Pay, the transaction is processed using a random string of digits—a “token”—instead of the customer’s actual card number. The retailer never sees or stores the real account number. Each token is only good for one or a limited number of transactions, so the tokens are useless to a criminal who might steal them. This makes a Target-style data breach much less likely.

What are the costs and benefits of accepting Apple Pay?

The main benefit of accepting Apple Pay is that it may help attract new customers and grow your business. First, some customers appreciate the convenience of being able to pay with their phones, and they may frequent retailers that accept Apple Pay. This technology eliminates the need for consumers to handle cash or even carry around a wallet, making the checkout process faster and easier.

The main cost of accepting Apple Pay stems from the need to have point-of-sale terminals equipped with NFC technology.

How can I start accepting Apple Pay?

Talk to your card processor to find out about the NFC and Apple Pay options they offer.  Be sure to inquire about all related costs, such as equipment and transaction fees.

For more information, use the CMUSA​ Ask an Expert tool or check out some of the other articles we’ve shared about Apple Pay:

Key Topics

iPhone