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Table of Contents

Lead Story

How to network like an industry leader - Part 2


Industry Update

EMV gets a boost from Obama

Does Apple Pay debut usher in new era of banking?

ISO lesson in PayPal's digital gaming domination

Record crowds turn out for industry shows


Putting a positive spin on outsourcing

Making plans, taking action

All you need to know about Apple Pay

John Kiernan

Mobile ecosystem expanding in all directions


Mobile wallets: not quite ready for prime time

Patti Murphy
ProScribes Inc.


Street SmartsSM:
Investing in partnerships

Tom Waters and Ben Abel
Bank Associates Merchant Services

Preparing your customers for EMV

Michael Gavin
Merchant Warehouse

Taming fires on the evolutionary road

Jeff Fortney
Clearent LLC

Company Profile

Alpha Payments Cloud

New Products

Tablet empowered merchants


Loyalty building in a snap

EVO Snap


Do your waters run deep?


Readers Speak

Resource Guide


A Bigger Thing

The Green Sheet Online Edition

November 10, 2014  •  Issue 14:11:01

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All you need to know about Apple Pay

By John Kiernan

Editor's Note: Editor's Note: This article was published by CardHub at on Oct. 19, 2014. Copyright © 2014 by CardHub; all rights reserved. Reprinted with permission.

The latest innovation out of Cupertino, Calif., is here: Apple Pay. Apple Pay is the technology giant's entrant into the emerging world of virtual wallets and is now available on the iPhone 6, iPhone 6 Plus, iPad Air 2, iPad mini 3 as well as the forthcoming Apple Watch. With it, users can enter their credit card information into their devices or iTunes accounts and then use the devices to securely make purchases either online or at the point of sale.

As things currently stand, Apple Pay is accepted at 220,000 brick-and-mortar stores across the United States, including locations of mega-retailers like Whole Foods, Macy's, McDonald's, Chevron and Subway. All in all, it can be used with 35 retail brands in person and 23 store brands online. Apple Pay can also be used to make purchases through 18 apps, including Uber, Lyft, OpenTable and Airbnb.

With that being said, there are still bound to be countless questions about this new payment technology, and we'll do our best to answer them below.

How Apple Pay works

The experience of using Apple Pay will differ slightly depending on whether you're shopping at the point of sale, through an app or online. It all starts with loading your payment information into your device, however, and there are a few different ways to do that.

Loading credit card information

  1. Taking a picture: You can add a credit card or a debit card into your Apple Pay account by simply taking a picture of it with your phone or iPad. Apple will then verify with the bank that the card is indeed yours and securely store your payment details in the phone's "secure element" (a special computer chip).
  2. Entering manually: You can also enter your credit or debit card details into your phone by hand. The same verification and storage procedures as when you take a picture will then take place.
  3. Using a card from iTunes: Apple Pay is synced to your iTunes account, and you are able to simply choose to use the credit card or debit card that you already have on file.

When you load a credit or debit card to your phone, it is assigned a unique Device Account Number, which is encrypted and stored in the device's secure element. It is also saved for quick viewing in the device's Passbook. It is this Device Account Number, and not your 16-digit card number, that is then used to make purchases.

You can save up to eight different cards in your device by these means. You will also be able to select a default card for quick use or simply scroll through your various saved cards upon preparing to make a purchase.

You can load credit cards and debit cards from any of the more than 500 banks and credit unions that are part of the Apple Pay platform, including American Express, Bank of America, Barclaycard, Capital One, Chase, Citi, Navy Federal Credit Union, PNC, USAA, US Bank, and Wells Fargo.

Making purchases at the point of sale

Making a purchase at the point of sale is quite simple with Apple Pay. All you need to do is hold your phone over the contactless reader on the point of sale machine and Apple Pay will come up. You can then use the default card or choose from one of the other cards stored on your device. To complete the purchase you'll simply press and hold the Touch ID button, which scans your fingerprint for verification. Your phone will then vibrate and beep and you will receive a notification of the transaction.

Making purchases online or through an app

Making a purchase online or through a mobile app is pretty straightforward as well. Apple Pay simply shows up as a payment option with participating merchants/apps, you click on that option, and then verify using the Touch ID button. That's it.

How transactions are verified

One of the most important aspects of Apple Pay's security is the way payment information is relayed to merchants and verified by your bank. Each transaction is assigned a one-time payment number as well as a dynamic security code, and that information is encrypted and used in place of your credit or debit card particulars. As a result, cashiers will not see your name or any of your card information.

Pros and cons of Apple Pay



Apple Pay competitors

Apple Pay is not the first virtual wallet to hit the market, nor will it be the last. The service, though buoyed by the supreme popularity of Apple's products, faces a few notable competitors. Some of the most popular competitors include:

An overview of each of the competing mobile wallet brands, as well as links to expert opinions on Apple Pay by seven university professors specializing in technology and management – Han Zhang, David Hendrickson, James Grimmelmann, Benjamin G. Edelman, Gang Qu, Chuck Davis and Sarit Markovich – can be found at

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Simpay | USAePay | Impact Paysystems | Board Studios