An Apple Pay Keeps the Hacker Away

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Sep 16, 2014
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Is Apple Inc. (

AAPL, Financial) on its way to revolutionize the payment domain as it did in the music and phone domain? After the rather overwhelming launch of its new clan of iPhone6 phones, the next big news cooking up in the Apple mills is the Apple Play, which is about to create another storm in the market come October. Tall claims of heavy security net and user convenience are already doing the rounds in the street. Let us delve a little deeper to find out how seamless Apple Play is going to be and whether it is poignant enough to spearhead the mobile wallet arena and move ahead of its already existent wallet competitors.


Leather wallets vs. mobile wallets


Since time unknown, the leather wallets in our pockets have been our best partners and have always fulfilled our needs and desires; at the same time quite a number of times the crooks have managed to pick them out of our pockets and fulfill their desires. Also don't forget the times when in a rush we forget the leather wallet on the table only to remember them when the cabbie asks for the fare and we have to call a friend for help. But are we headed for a change with the advent of the mobile wallet. Apple Pay is not the first mobile wallet. Let us have a brief understanding of mobile wallet.


Mobile wallet – how it works

It is a special chip inbuilt in the handset which sends a signal to the register in the payment counter about transfer of funds from the customer’s account to the stores account as per the invoice amount. The chip is termed as Near Field Communication chip. The card details of the customer have to be pre-entered by the customer beforehand into the handset. Apple Pay app is not the first of its kind and is available in the market on the popular Android, Windows Phone and BlackBerry (

BBRY, Financial) devices and works with Google (GOOG, Financial) wallet, Softcard, PayPal and other services. An estimated 220,000 retail stores already have NFC devices at the register.


Then why is it not yet that popular and why is the mere announcement of Apple Pay creating such frenzy in the market? The major area of concern when it comes to hard-earned money is the security of it. In a recent Thrive Analytics survey, 46% said they're worried about security. Meanwhile, 37% say mobile payments are actually cumbersome. Right now, you have to pull out your phone, unlock it and dial a code; the possibility is someone might just sneak in from behind your shoulder and get your code. It's no faster than pulling out the card from your leather wallet and getting it swiped at the counter. Also there's no single mobile payments system. Different stores require different apps, and some of those apps don't accept every type of credit card. This is where Apple is using its moxie to sum up all the current issues and resolve them and put it in one revolutionary app the Apple pay and change the trend in the market.


Why pay with Apple Pay???

Apple claims Apple Pay to be easier, safer and available with every major credit card and at far more retailers than the competitors.

  • How is it easier?

Just pressing your thumb on the screen is far less effort than typing in the card PIN or signing the pay in slip. The Samsung (

SSNLF, Financial) Galaxy S5 wallet allows payment through thumb scanning but in order to use it you also need to use the app to check into the store.


  • How is it safer?

Anyone can hack and duplicate your PIN but can anyone replicate your fingerprint unless they physically cut your finger, a safety feature which is undoubtedly a unique one since a fingerprint is unique in every human being. This also means that your near and dear ones can’t add up to your shopping amounts unless you approve physically. For example, if someone steals your Android phone and knows your four-digit Google Wallet PIN, they could use your wallet until you remotely disable the phone.


Mobile payment also makes the possibility of financial data leakage minimal since under conventional way when the card is swiped at the retailer's counter the information gets passed on to the retailer and then from there it is sent to the bank for the transaction. With mobile money you have to click the photo of your card, and the photo is sent to the bank against which, after verification, the bank issues a unique code which gets stored in the phone and no card details are stored in the phone, while checking out from any store during payment when the thumb is placed on the scanner as in Apple Pay the unique code generates a random one-time digital password which is again verified at the bank’s end and the transaction happens. In this whole technically advanced process, the financial data is nowhere available to the retailer or the handset company hence more enhanced privacy than swiping the plastic card.

Even if hackers steal the password, it's useless. It won't work twice. It's a major improvement over the static, easy-to-copy information on the current credit card.


That effectively chokes off the black market for credit cards, said Rich Aberman, co-founder of secure payments tech startup WePay, and it has the potential to stem the rise of major hacks at the retailers end. Even if the Hi-Tech crooks manages to break all the layers of security how will they replicate the unique fingerprint which gives the Apple pay an edge over the other mobile wallets.

The Extra Miles travelled by Apple to make Apple Pay your true Wallet

Apple Pay will work with American Express (

AXP, Financial), MasterCard (MA, Financial) and Visa (V, Financial). Apple also has entered into credit card deals with these banks:


And these retailers:

  • Bloomingdale’s
  • Disney Store and Walt Disney World (DIS)
  • Duane Reade (DRD)
  • Macy's (M)
  • McDonald's (MCD)
  • Sephora
  • Staples (SPLS)
  • Subway
  • Walgreens (WAG)
  • Whole Foods Market (WFM)


The Apple advantage to Apple Pay

Any product coming out of the Apple cart has its own unique finesse and seamless working prowess, same can be expected of Apple Pay going by the declaration of Apple and the data in the market. However, it would be best to wait and watch the performance of the app once it hits the market.


For all the Apple fans, it is an app worth the penny and certainly would prove to be a game changer in the mobile wallet arena.

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