There’s been a huge amount of hype online about Apple’s newly announced mobile payment system “Apple Pay”. So, why the hype, how does it work, and just how revolutionary is it? Lets dig into it and find out.

How it works
The concept at a top-line seems simple. You use your mobile phone to “tap and go” a payment at your local store, supermarket or service station.

We do it all the time. With “Paypass” or “Paywave” enabled credit and debit cards, you get to the point of your transaction where the payment is required, and you show the cashier your card (indicating you’re going to “tap and go”). They push a button on the register which sends the “sale amount” over to the credit card terminal. Just a year or more back you’d then slide your card through, choose an account, enter a PIN and press OK.

More recently you probably found yourself inserting the card into the machine, but the real revolution came with the “tap and go”. Now you simply move your card close to the payment terminal (normally within 5cm) and hey presto – payment is made.

Fast Forward to an Apple Pay enabled world and it’s a whole lot different – and, in my view, more secure.

Your iPhone 6 (or 6 Plus) is in your pocket.

Transaction complete, you tell the cashier you’re paying by card. The card terminal is ready for payment.apple pay

Grab your phone, no need to unlock it, just point it closely to the terminal. Immediately on-screen you are presented with your credit or debit cards – you tap the one you want to use, place your finger on the TouchID sensor and the payment goes through.

To setup Apple Pay on your phone (available only in the US right now), you open up Passbook and add a new card, this simply allows you to point your camera at the card, rather than typing the card number, enter the expiry and CVV and then Apple authenticates the card with your bank.

The Banks
The issue for Aussies at the moment is that Apple have only rolled out Apple Pay in the USA. The reason for that is not the hardware, not the retail stores, but the Banks. Apple has to do deals with the bank to create the authentication of cards into the system.

Read more on my EFTM website here.