What is Apple Pay and How Does it Work?

ByManoj Bhatt

Apple Pay is a mobile payment system developed by Apple Inc. that allows users to make payments with their iPhones, iPads and Apple Watches. The service works by using Near Field Communication (NFC) technology to transmit payment information between the device and a contactless reader. This allows users to pay for goods and services by holding their device near the contactless reader and authorising the payment with their fingerprint or a passcode.

Apple Pay was first introduced in October 2014 as part of the iOS 8 update. The service initially supported payments made with Visa, Mastercard and American Express debit and credit cards from a number of banks in the United States. It was later expanded to include support for payments made with UK debit and credit cards, as well as payments made with store loyalty cards and transit passes.

Apple Pay is available in a growing number of countries and regions, including the United States, the United Kingdom, Canada, Australia, China, Hong Kong and Japan. The service is also supported by a number of merchants worldwide, including McDonalds, Subway and Whole Foods Market.

Apple Pay is compatible with iPhone 6 and later and Apple Watches running on the latest operating system. The service also works with iPad Pro, iPad Air 2 and iPad mini 3 or newer devices. Users can add their Visa, Mastercard and American Express credit or debit cards to their device’s digital wallet. Customers can also add their store loyalty cards and select stores support Apple Pay as a method of payment.

How does Apple Pay work?

Apple Pay allows users to make payments with their iPhones or other compatible devices by holding the device up to a contactless reader at a store, entering a transit pass code on a reader for buses, trains or other transportation, or scanning a barcode to make a payment in apps.

When making a payment in person, the user must hold their device near the contactless reader and authorise the payment with their fingerprint or passcode. The device will then communicate with the contactless reader to transmit the payment information. The user will also need to use their fingerprint or passcode when making a payment in apps.

Apple Pay is not currently available for online transactions, but Apple has announced it will be rolled out across all major US banks later this year.

Which devices are compatible with Apple Pay?

Apple Pay uses NFC technology to allow users to make payments using their iPhones and Apple Watches. The service is available on iPhone 6 and later, iPad Pro, iPad Air 2 and iPad mini 3 or later. Users can also add their Visa, Mastercard and American Express credit or debit cards to their device’s digital wallet.

Websites must also support the latest versions of Safari, Chrome or Firefox to use Apple Pay in apps and Safari on MacOS Sierra to use the service to make a purchase in a website.

Is there a fee for using Apple Pay?

For users, there is no additional fee when using Apple Pay. Issuers also have the option of adding their cards to Apple Pay for free or setting up a flat fee for all Apple Pay transactions. For merchants, there is no additional fee to use Apple Pay and it is one of the cheapest payment processing options available.

What are the benefits of using Apple Pay?

Apple Pay is a secure and easy-to-use mobile payment system that offers a number of benefits for users, including:

  • Quick checkout using a device’s fingerprint sensor.
  • Convenience as the payment information is stored in the device’s secure element, allowing users to make contactless payments without carrying around a wallet or purse.
  • Security as Apple only stores the minimum amount of customer data needed for transactions, and each transaction is authorised with a one-time unique security code.

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