Apple unveiled its new Apple Pay mobile payment service Tuesday for its new iPhone 6 and iPhone 6 Plus and even Watch users come 2015. By all accounts it looks super easy to use, super secure and already has some stellar retail support.
But whether consumers are willing to dump the wallet, the coin purse and of course all those plastic charge and debit cards is the big question. Earlier tries by some notable names, including Google and eBay, didn't make it happen.
But then again, they weren't Apple.
Apple's service uses a combination of near-field comunication, Touch ID, and security chip called Secure Element to allow users to make purchases with an iPhone and, later down the road, with its new wearable Watch.
Apple has a long history of not being the first one to the party when it comes to using new technology as it feels it's more important to get it right than to release a half-baked idea and be first.
For example, in October 2001, Apple announced its first digital music player. The iPod wasn't the first MP3 player to hit the market but its ease of use and gorgeous design quickly made it a must-have device for all music lovers. The iPod changed Apple's future and quickly became the music player everyone wanted to own.
When Apple released the original iPhone in 2007, it entered a competitive market that was dominated by BlackBerry, Nokia, Palm and other smartphone manufacturers who all had years of experience and several generations of devices under their belts. In true Apple form, the iPhone was a beautifully designed device inside and out and it didn't take long for the newcomer to quickly become the market leader.
Google got a head start in mobile payments when it unveiled its Google Wallet initiative in 2011, which allows Android smartphone users to easily make secure payments quickly by tapping their phone on any PayPass-enabled terminal.
Now Apple has entered the mobile payment world with its new Apple Pay. Apple CEO Tim Cook admitted Tuesday that Apple wasn't the first to attempt replacing card-based payment approaches, but believes Apple has gotten it right. It's fast, secure and makes buying something in a store or online a one-second task.
Apple has made the feature super simple to use. Most important, it's completely secure thanks to a combination of using NFC, Touch ID, and a new security chip called Secure Element. Users add a credit card to Apple's Passbook by taking a picture of it using the iPhone 6 and iPhone 6 Plus' camera. The card is then verified by the bank and the info is automatically added to Passbook.
Apple Pay eliminates the risk of user's name, card number, and security code getting into the wrong hands. Cook noted that Apple does not store the number or any purchase details, or transfer any of that data to the merchant during a transaction. Instead, it uses a device number and dynamic security code during the transaction.
So far retailers are clearly on board as the list of brick-and-mortar partners and mobile stores is impressive. Apple Pay partners include American Express, MasterCard, and Visa and most of the largest U.S. banks. Apple also said that it is working with several retailers, including McDonald's, Macy's, Bloomingdale's, Walgreens, Staples, Whole Foods and more.
