In stores up and down the country, the Apple Pay logo has started appearing at checkouts. Major retailers like Boots, Costa, Lidl, McDonald's, and Waitrose, to name but a few have embraced it. And, the majority of UK banks, including American Express, Barclays, Halifax, HSBC, Lloyds, MBNA, NatWest, Nationwide, RBS, Tesco, TSB, and Santander, support it. But, what is Apple Pay? How does it work, and how secure is it?
What is Apple Pay?Apple Pay is a contactless payment system for your (Apple) phone; that works in much the same way that contactless credit cards do. It launched in the UK in July 2015, around nine months after debuted in the USA, and is now also available in Australia, Canada, China, France, Singapore, and Switzerland.
What are the benefits of Apple Pay?Perhaps the main advantage of Apple Pay is the convenience it offers. You no longer need to carry a purse/wallet and your phone to make transactions. However, Apple Pay has other benefits that don't necessarily become apparent until you need them. Unlike PayPal and some other online payment systems, Apple does not break the direct relationship which is forged between a retailer and your credit card issuer for you to gain Section 75 protection.
Section 75 is the enhanced purchase protection that UK credit card users receive on goods costing more than £100 - click here to read more about Section 75.
How does Apple Pay work?Apple Pay is available to users of iPhone products from the iPhone 6 onwards, Apple Watch users (with an iPhone 5's or more recent model), and iPad users with an Air 2 model or later model.
It takes advantage of the Apple Wallet (previously called 'Passbook') to store physical card details electronically. Details are either captured by using the device's camera to photograph the card, or they are manually entered into the Wallet using the keypad. Card details are then verified by the issuing bank or credit card supplier by text, email or phone call. Once your card details have been verified, the card is ready to use.
Just like a real purse or wallet, you can store all of your cards in your Apple Wallet. To change the card you use to pay, you just enter the Wallet app and toggle between your different payment cards to selected the card you wish to pay with. As in the physical world, if you can't use a particular credit card with a retailer (i.e. American Express), you will not be able to use that card via Apple Pay.
Once you have selected the card you wish to pay with, you are ready to make a purchase. You simply inform the cashier at an accepting store that you want to pay with Apple Pay and use your device to pay 'contactlessly' (as you would with a contactless card). The only difference being that with iPhone payments you need to double click the lock screen, and hold your finger to the fingerprint ID scanner to verify the transaction. With Apple Watch payments powering older iPhone model you will need to enter your security code.
How secure is Apple Pay?In theory, Apple Pay is more secure than a standard contactless card as it requires additional verification to complete a transaction. Apple Pay also uses a tokenised system for payment information, so your real card details are never available, even to the store cashier. And, beyond that, there are other reasons to believe that Apple Pay is perhaps the most secure payment system in the World.
Apple owns and operates its entire payment ecosystem. It runs a gated app store, whereby the code for new apps is reviewed before they become available to the public. Further, to this, Apple Pay is powered by a dedicated chip, that other apps cannot access. All of this means that Apple Pay is not susceptible to the external threats that many other payment systems are.
Where can I get an Apple Pay credit card?The majority of UK credit card issuers now offer Apple Pay as standard, but not all do. If you are keen to ensure your next card does support Apple Pay use our dedicated table to compare the best Apple Pay credit cards.
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