APPLE PAY

A PROMISING FUTURE

PAUL

TOCATLIAN

I’ve been using Apple Pay since November 2014

Paying with Apple Pay is faster and more

convenient than cash, checks, debit or credit

cards.

IT’S (ALMOST) TIME TO SAY

GOOD-BYE TO THE MAGNETIC

STRIPES IN OUR WALLETS

ONCE UPON A TIME:

MAGNETIC STRIPES

Most U.S. merchants still process payments using a

technology that dates back to the 1960s: a magnetic stripe on

the back of your credit card that is read by swiping it through

a point-of-sale terminal.

1 Gallon

$0.49

Game

Console

Bill

Gates

Steve

Jobs

MAGNETIC STRIPES

ARE FLAWED

They hold all of the

information needed

to produce a

flawless counterfeit

card: roughly

23 characters of

static data as the

sole authentication

mechanism for a

payment.

CREDIT CARD HACKING

NEARING EPIDEMIC LEVELS

$11 BILLION IN LOSSSES ANNUALLY

BACK TO THE FUTURE:

CHIP-AND-PIN

CHIPS SAFER? YES. SAFE? NO.

Unfortunately, chip readers

are not widely used by

merchants in the U.S. at

this time.

As a result, cards with

chips continue to include

magstripes.

If stolen, a card can be

swiped, or the information

contained on the card can

be used for “card not

present” e-commerce

transactions.

NFC TO THE RESCUE:

MOBILE WALLETS

NFC is a wireless technology that allows for

secure short-range communications and is used

to implement contactless payment systems.

Smartphones with an embedded NFC chip can

now double as your wallet. You no longer need

to swipe your card.

In 2011, Google announced Google Wallet that

takes advantage of NFC.

APPLE PAY

On October 20, 2014 Apple launched Apple

Pay, which is also based on NFC and works

on the iPhone 6 and iPhone 6 Plus.

Although the inner workings and

backends of these NFC-based

payment systems are complex, the

result is a simpler and more secure

experience. Card details are not

shared with merchants or

transmitted with payment. Hence,

your card information is less

susceptible of being compromised.

APPLE PAY:

A CLASS IN ITSELF

Apple Pay takes it a few steps further than any other payment system on the market today:

• Payments aren’t authorized without the iPhone 6 Touch ID sensor matching your exact fingerprint.

• Apple does not get involved with the purchase thanks to its tokenization system & secure element on the iPhone.

• Paying with Apple Pay takes less than two seconds. And you’ll be able to pay with Apple Watch soon.

MERCHANTS

Many merchants are benefiting from their early adoption

of Apple Pay:

• McDonald’s saw Apple Pay accounting for 50% of all of its

tap-to-pay transactions.

• Apple Pay doubled the number of mobile wallet payments

being made at Walgreens.

• Apple Pay accounted for an estimated one percent of all

Whole Foods transactions.

APPLE PAY

ECOSYSTEM

Although just launched, you can already get a glimpse of the power and reach of Apple Pay. As of November 2014:

• Apple Pay was accepted in 220,000 stores and new partners are signing up on a regular basis.

• Apple Pay is integrated with American Express, MasterCard, and Visa networks.

• Leading card issuers, including Bank of America, Chase, Citi, and Wells Fargo have signed up.

• Dozens more banks and merchants signed up in December.

• Apple Pay could be expanding to Canada as soon as March.

MAKING THE WORLD

A BETTER PLACE

Very much like iTunes

changed the way we

listen to music, Apple

Pay can change the

way we pay for things.