The Apple Watch locks payments when it's removed from wrists and the iPhone 6 needs to scan an account-holder's finger before it'll talk to near-field communications terminals at cash registers.
These are examples of the practical and thoughtful engineering that went into Apple Pay and count as reasons why the world will fall out of love with magnetized plastic cards.
Back when Apple was only rumored to be preparing to roll out a virtual wallet system, the unimpressed were pointing to Google's floundering efforts to drive a similar service into the mainstream.
During Apple's press conference, it played a video of a woman encountering almost every kink that can occur during checkout with a physical credit card. The woman had to search her purse for her card, show her driver's license and sign for the purchase.
Google's digital wallet streamlined parts of the checkout process, but users still had to launch the Google Wallet app and confirm their identities by entering their pins. Not only is Apple's Passbook and Touch ID software compressing the formula Google used, the iPhone maker is also gaining the support on theback end needed to make waving a smartphone or a wristwatch at a register commonplace.
Apple has brought on board heavyweights from the financial and retail industries, supporting the virtualization of major credit cards and the acceptance of NFC at registers.
There was a time when small- and midsized-businesses balked at the idea of having to purchase card readers and support card-waving patrons. With NFC kits starting somewhere around $500 and only about 10 percent of merchants said to be maintaining the units, Apple finds itself at a similar juncture in the progression from card stampers and manual entry to digital readers.
Chris Ciabarra, Revel System's chief technology officer, said his point-of-sale software providing company fielded calls from somewhere around 50 clients who want to adopt NFC payments, after Apple made the world believe it was time to move away from physical credit and debit cards.
"The truth is, today, no one uses NFC," said Ciabarra. "For this to take off, it has to start with that reader device."
Though not every financial analyst is optimistic about Apple Pay's chances to birth the widespread adoption of NFC payments, senior research analyst at Citi Jim Suva's take on Apple's digital wallet system is echoed by others in the United States' financial sectors.
"Apple Pay has already signed up major issuers that control 83 percent of the credit card payment transactions today in the U.S. -- also, 22,000 retailers have signed up," states Suva. "Key selling features of Apple Pay: One-touch checkout, no need to enter card number/address once it is already loaded in Apple Pay, and no card information shared with merchant. Also, Apple made it clear they don't store the transaction data. We believe Apple Pay will accelerate the time line for mobile payment."
