Apple Pay: Things You Need To Know

Rumors are circulating that Apple Pay is about to go live any day now. Indeed, early reports are suggesting that employees of both Apple Stores and Walgreens are being prepped for Apple Pay's launch date, which could be any day this week. Apparently, Apple's employees are now being trained on the Apple Pay process (how to set up accounts, how to process transactions). Moreover, a Walgreens memo had recently leaked -- in the internal document, the drugstore chain is advising its employees that Apple Pay will be launching later within the week. 

No doubt, those who are eagerly awaiting the official launch of Apple Pay must be fraught with excitement by now. But as for those who are not familiar with Apple Pay yet and are interested to learn more about it, we are presenting to you a quick primer below. 

What It Is

Apple Pay is a mobile payment system created and developed by tech giant Apple. Simply, it is a system that allows users to make payments through their Apple devices. It is being positioned as an alternative to the usual credit card payment system.

The Components That Make The System Work

There are four key components to the system: the EMV (Europay, MasterCard, Visa) compatible chip inside Apple devices, the Touch ID system, the 16-digit Device Account Number that stands in for a real credit card number, and the cryptogram supplied by the payment network to be used to validate transactions. Both the device account number and its related cryptogram are stored safely in the chip. As for the Touch ID, this fingerprint reader is used to authorize transactions.

Devices Compatible With Apple Pay

Apple Pay is compatible with the iPhone 6, the iPhone 6 Plus, and the Apple Watch. Apple Pay can be used with the iPhone 5, the iPhone 5C, and the iPhone 5S when paired with the Apple Watch.

How To Get Started Using Apple Pay

To use Apple Pay, you will need to open the Passbook app, which is built in your compatible Apple device. You can add cards by importing them from iTunes (card security code required), taking a photo of the card using your iPhone device, or by manually inputting card information. Once card info is entered, your device will communicate with your card provider's network (MasterCard, Visa, American Express) who will in turn send back encrypted the 16-digit Device Account Number and its accompanying cryptogram. 

Using Apple Pay

You will be able to pay through your Apple devices whenever a compatible point-of-sale (POS) terminal requests for payment. Payment can be made through your default card by simply placing your finger on the Touch ID button (to authorize the transaction). If you want to use an alternative card other than your default card of choice, you just have to wait until your device asks you which payment method to use, then you can select the alternative card from Passbook, and then use Touch ID to authorize. What happens next is that the chip in your device relays the Device Account Number and its cryptogram to the payment network, which then validates the payment transaction. Once approved, your device will notify you of the successful payment. 

How Safe It Is

Well, here are three things to consider. One, the POS terminal never sees your actual card number. Two, Apple never sees any data or record of the transaction -- the chip only serves as secure storage for your the Device Account Number and its accompanying cryptogram. Lastly, the person operating the POS device will never see any card information (number, name), let alone even touch your card.