Is Apple Pay the Future of Mobile Payment Solutions?

Is Apple Pay the future of mobile payment solutions? The undisputed belle of the tech industry sure hopes so. 

With the release of the iPhone 6 and Apple Watch officially on the horizon—inciting the usual collective squeal of glee from iDevotees—the fact that the Cupertino, Calif., giant is also ushering in a new mobile point-of-sale system (using what’s been considered outmoded technology) in October has gone relatively unnoticed.

Courtesy Apple

Images on the Apple Pay site, showing examples of how the interface will look

Some facts and stats on Apple Pay:

  • Apple Pay is configured to work specifically with iPhone 6 (starting in October) and the Apple Watch (starting in January 2015).
  • The system uses near field communication (NFC) to transmit payments from a person’s iPhone to a merchant. Apple has said that users will be able to use Apple Pay at 220,000 stores nationwide, including Bloomingdale’s, Macy’s, and McDonald’s.
  • You don’t even have to open an app to pay, according to Apple. “To pay, just hold your iPhone near the contactless reader with your finger on Touch ID. You don’t even have to look at the screen to know your payment information was successfully sent. A subtle vibration and beep lets you know.” Touch ID is a new-ish security feature for Apple that recognizes a user’s fingerprints, in the vein of those sliding CIA doors in Mission: Impossible. It debuted on the iPhone 5S.
  • To pay with the Apple Watch, you double-click a button next to the watch’s crown, “and hold the face of your Apple Watch near the contactless reader. A gentle pulse and beep confirm that your payment information was sent.”
  • For mobile shopping, participating retailers will allegedly be adding a “pay with Apple Pay” button that will allow users to make purchases by putting their finger on the Touch ID button.

Reviews of Apple Pay have been largely favorable. But its potential to dominate the mobile-payments market is in question.

NFC has become a mainstay in many European and Asian countries—it’s huge in Japan—and Apple obviously thinks it can catapult the technology to next-big-thing status stateside. But big U.S. retailers including Walmart and Best Buy have roundly rejected the technology. 

The Wall Street Journal quotes Richard Crone, chief executive of payments advisory firm, Crone Consulting, as saying, “Apple has rallied the issuing bank side, but not the merchant side. Many merchants who had NFC acceptance have turned it off.” Why? The cost of supporting the platform didn’t pay off. 

Of course, that was before the most influential smartphone maker in the nation decided to give it a huge bear hug. If consumers accept Apple Pay, we’ll surely see more retailers accepting NFC.

In this week’s Time, writers Lev Grossman and Matt Vella contend that Apple is less a master of innovation than it is king of resurrections; it breathes new life into technology that barely has a pulse. And if Apple can successfully resurrect the wearable through its jazzy new watch, it also may be able to resuscitate NFC.

And the bulk of phones sold since 2013, Androids included, are loaded with NFC chips inside, making it possible for NFC as a payment method to go, within months, from barely breathing to winning a marathon. 


JCK Magazine Editor