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In all the hype and buzz about the launch of iPhone 6 and the unveiling of Tim Cook’s ‘one more thing’ (Apple Watch), the announcement of Apple Pay did not quite get the coverage it should have. Going by the first look and the detailed specs of Pay, it sure seems that the Cupertino company has done a splendid job of overhauling the process of digital payments and encouraging mobile commerce. Apple Pay isn’t going to hit the markets in the US, UK or Canada till early/mid-2015 – but we can definitely do an advance analysis of how it is going to help users:

A digital wallet like never before – Apple Pay can be paired with iPhone or Apple Watch, to keep track of all online payment modes. A database of all credit card, debit card and other transactions will be created by Pay, and maintained on the device it is paired with. Secure coding techniques would be used, to rule out unauthorized access. The presence of NFC – Granted that Near Field Communication (NFC) is not an absolutely new piece of technology, but its presence in Apple Pay is certainly worth a mention. NFC would facilitate users to communicate with others via their iOS handsets (much like Bluetooth LE, over shorter distances). The NFC chips will be in-built inside Pay, and no additional setup steps will be required. Android fans and app developers might not find anything to gush over this feature, but it is a big step forward for Apple (it’s a pity that the iPhone 6 does not have standalone NFC too). Account authorization by Passbook – Passbook is one of the truly breakthrough features of Apple Pay. Although there is still quite a bit of confusion among iPhone app developers and software analysts as to what the precise features of Passbook would be, this much is pretty clear – it would ‘capture’ (mind you, nothing about taking photos is mentioned) data about your credit/debit card, and use it to check whether you actually have access to an account. The verification would be done for relatively small amounts, and once authentication is complete – larger figures can be manually entered. Passbook will be present on close to 250 million iPhones worldwide. The iPad gets Apple Pay support too – This issue is slightly contentious, since no existing version of iPad has the necessary NFC technology (which nullifies the possibility of making in-store/retail payments). However, it is expected that the full iOS 8.1 update – already seeded to app development experts – would bring the full functionality of Apple Pay on iPad. Maybe a new iPad model is also in the offing? Assignment of Device Account Number – This would be done through the Passbook feature. Instead of having to use the actual card numbers (and becoming susceptible to cyber hackers), Apple Pay would assign a unique Device Account Number (DAN) to each of your card. The number will be stored in the proprietary ‘Secure Element’ of your iPhone. Apple has evidently taken a cue from the recent Home Depot security breach and the iCloud hack – and made sure that digital payments via Pay is not, in any way, vulnerable. Touch ID builds confidence – Apple brought Touch ID for the first time on iPhone 5S. Not surprisingly, it has been continued in iPhone 6 and iPhone 6 Plus too – and this feature would give transactions via Apple Pay an additional security boost. Although Android app developers remain sceptical about whether this fingerprint authentication system is indeed foolproof, it has been adopted and well-reviewed by close to 15 million iPhone users across the globe. Collaboration with iTunes – With plenty of online transaction details stored in the iTunes database, it is only natural that Apple’s breakthrough digital wallet supports them as well. Payment information can be accessed via a single tap. New card information can also be added, provided users give valid authentication photographs. The sole point of concern regarding this issue is – only Visa, Amex and Mastercard details can be added through Apple Pay. Hopefully, more merchant banks would be brought under the hood pretty soon. Confidential information need not be disclosed to third-party cashiers – When you are paying with a credit/debit card, the card number, code and other payment details have to be given to cashiers. With Apple Pay, that necessity has been removed. Experts on mobile software and iPhone app development have highlighted the ‘tokenization’ of card numbers for this additional privacy. What’s more – not all user-transactions would be displayed/stored in Passbook. Only the most recent ones would be available for viewing. Quick and easy payments – So much for the technical excellence of Apple Pay – how would it actually work? It’s an interesting and extremely simple process. After you have added your card information to Pay (the first card becomes the default), you can make payments by holding your iPhone/Watch in front of the touch-free reader devices that are present at many leading retail stores. There would be a vibration and a notification generated – confirming that your transaction has successfully gone through. Lost your phone? Not a problem – Oh well, it IS a problem if you lose your brand new, expensive iPhone 6/6 Plus. However, you can at least ensure that no one else would be able to unethically use your digital wallet stored in it. The ‘Find My iPhone’ application can be used to disable the NFC feature on the lost device remotely. Once that is done, no further financial transactions would be possible. Your account information would remain safe. Purchasing physical goods through apps – Apple Pay expands the scope of in-app purchases manifold. In addition to virtual products (for instance, games in an iPhone app for kids), people would now be able to buy physical items via the digital wallet too. The biggest advantage of this feature is, manual insertion of credit/debit card details would be no longer required for individual transactions. During the September 9 event, Apple Pay was showcased on the Target app – and already, retail biggies like Starbucks, Groupon and Uber have extended their support to Pay. Holistic buying experience – that’s what Apple Pay promises. Special offers, reward points and other benefits – Adopters of the Apple Pay technology would no longer be using their cards for each of their purchases. That, however, does not mean they won’t get the special deals and offers that are periodically announced by banks and credit card companies. Pay would gather such information and send along notifications to users. Whenever you become entitled for a reward or special card benefit, you will get the intimation. Skin contact requirement for Apple Watch – NFC has not been provided on Apple Watch – and a separate technique has been used for people who would be using Pay through their smartwatches. The device would have to be unlocked (with a unique Passcode), and kept in contact with the wrist during the transaction. The wallet will be able to auto-detect if the Watch is no longer in skin-contact – and in such situations, the payment will be aborted and the passcode will have to be re-entered. Experts from mobile security and iPhone app companies feel that this is indeed a safe method for processing online payments.

Of course, the performance and reliability of Apple Pay can be properly judged only after it is commercially released – but the above features suggest that it would do well on the user-convenience and financial data security fronts. The fact that neither the server nor the app (that would be used for purchases) gets to ‘view’ credit card details is an added advantage. Tim Cook has promised that Apple Pay will ‘forever change’ the way people make online purchases. We will have to wait and watch whether such a revolution in digital payments indeed occurs!