What it is: Apple Pay connects to your credit card, allowing you to make purchases without giving up your credit card number.
Before Apple introduced Apple Pay, they introduced TouchILD, a fingerprint sensor on the iPhone. Most people thought that using a fingerprint to unlock your iPhone was interesting, but not crucial. However Apple likely didn’t introduce TouchID for the relatively trivial taks of unlocking a phone but to support Apple Pay.
The idea behind Apple Pay is that you link a credit card to Apple Pay and now you can make payments through your iPhone. To verify that it’s really you making the purchase, you have to use TouchID to recognize your fingerprint. This keeps a thief from stealing your iPhone and making purchases through your Apple Pay account.
Apple Pay protects consumers by preventing the retailer from receiving your credit card number. In the past, each time you charged a purchase on your credit card, the retailer would get a copy of your credit card number. That’s why hackers would break into the computer networks of major retailers like Target to steal the tens of thousands of credit card numbers stored from so many credit card transactions. In the past, credit cards were highly risky ways to make purchases.
Apple Pay prevents a retailer from ever seeing your credit card number so nobody knows your credit card number but you and your bank. By requiring fingerprint validation, Apple Pay makes it nearly impossible for someone to make purchases through your Apple Pay account. Now Apple has moved Apple Pay to online shopping.
Normally when you purchase anything online, you have to type your credit card number. Not only does this store your credit card number on an online retailer’s computer (where hackers can find it), but it also allows anyone peeking over your shoulder to see your credit card number as well. Keystroke loggers, secretly installed on a computer, can also capture your credit card number as you type.
Apple Pay avoids all that by simply letting you shop online and purchase items using Apple Pay. To verify your Apple Pay account, you just have to put your iPhone near your Macintosh and use TouchID to verify your purchase. Now your credit card number is safely hidden from everyone.
What makes Apple Pay unique is that it’s not just a contactless payment system like rivals Samsung Pay and Android Pay. Instead, Apple Pay is an entire ecosystem. Once you get used to using Apple Pay on your iPhone, Apple Watch, or Macintosh, chances are good you’ll never switch to Android or another mobile operating system. To shop with Apple Pay in a store, you can use an iPhone or Apple Watch. To shop online with Apple Pay, you need an iPhone and a Macintosh.
If you choose Samsung Pay, you’ll be limited to using it only on Samsung devices. If you choose Android Pay, you can use it on any Android device, which makes Android Pay far more attractive than Samsung Pay. However, to purchase items online with Android Pay requires fingerprint verification, which means you need to get an Android device that supports fingerprint recognition. You an still duplicate the features of Apple Pay with Android Pay, but it’s not as convenient.
The main purpose of both Apple Pay and Android Pay is to get people hooked on using this payment system so it will be harder to switch to a rival device. Apple Pay makes it easy to pay with an iPhone (with fingerprint verification) and Apple Watch (that uses its sensors to verify it’s you wearing the Apple Watch). Apple Pay can seamlessly make online payments by connecting to an iPhone and presumably also an Apple Watch. If you have Apple Pay, you either have an iPhone or an Apple Watch. To use Apple Pay online, you just need a Macintosh, so Apple Pay can be an indirect way to increase Macintosh sales and keep current Macintosh users loyal as well.
Apple Pay isn’t just another me-too payment system like Samsung Pay, but an entire integrated system that lets you make safe, secure purchases with an iPhone, Apple Watch, and Macintosh. The more people continue using Apple Pay, the more likely Apple Pay (and Android Pay to a lesser extent) will become the standard for secure credit card transactions. When hackers keep stealing credit card numbers but Apple Pay users are unaffected, more people will gravitate towards the security of Apple Pay.
So expect to make more purchases using Apple Pay in the future. It’s for your own security, but it’s also for Apple’s long-term benefit.