The Apple Pay system debuts this October, and after a bevy of technology startups and even Google have tried and failed to digitize the almighty leather wallet, analysts are betting Apple will succeed.
Unveiled alongside the new iPhone 6 and iPhone 6 Plus, Apple Pay has brought all of the major payments players under one umbrella. Upon launch, users will be able to scan their existing Visa, MasterCard, and Amex cards using the phone's built-in camera, and store them in Apple's Passbook app.
When they visit retailers like McDonalds, Starbucks, Target, or anyone who has tap-to-pay credit card terminals at checkout, users will be able to tap their phones to the terminals to make a payment. Instead of signing a slip of paper to authenticate the transaction, they'll "sign" by pressing their thumbprint on their iPhone's home button.
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By bringing together the major payment networks (like Visa), the largest credit card-issuing banks (like JPMorgan Chase), and retailers (like McDonalds), Apple stands to make even the smallest transactions a breeze.
"The ability to be able to tap and go will make it easier than fumbling through your pockets for change or digging for crumpled bills at the bottom of your purse," said Chris McWilton, president of North America operations at MasterCard, according to The Wall Street Journal
that the transaction is far more secure than the current credit card landscape. Currently, retail employees working the register can see all the information on a customer's credit card, and signatures don't do much by way of fraud prevention.
With Apple Pay, the register employee and the merchant itself never see the credit card number; they only see whether or not the transaction was approved by the bank. On top of this, Apple Pay replaces the signature with a fingerprint scan using its Touch ID sensor that's built into the iPhone's home button. The fingerprint is also never transferred to the merchant or the bank, and stays secured in a special piece of hardware on the phone.
"Apple has taken pieces of the payments ecosystem that exist today, combined it with their technology and their customer base, and pulled it together into a unique payments experience for their customers," said McWilton.
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