We recently wrote about how payment processing has evolved over the last 50 years. Apple’s release of the iPhone and iPad in 2007 and 2010 allowed a revolutionary way for merchants to accept payments on-the-go. Now, companies have expanded that revolution to the consumer as well, with technologies like Apple Pay and Google Wallet. Apple is taking that trend one step further by allowing consumers to pay with their wrist wear.
The Apple Watch, set to launch on April 24, will allow consumers to pay for everyday purchases with a wave of the wrist. This is extremely convenient for customers, but it relies on merchants to provide compatible hardware at checkout—the same contactless readers used with Apple Pay on traditional iPhones.
How does it work? As with all Apple Watch functions, it requires a synched iPhone. Users will add new credit or debit cards using the Apple Watch iPhone app. Card information can be captured using the iPhone’s camera, or can be entered manually by the user. Double-clicking the Apple Watch’s side button allows the user to switch card options. To pay, the user simply holds the watch’s face near the reader.
According to Apple’s Eddy Cue, senior VP of internet and software services, paying with an Apple Watch will be easier than paying with an iPhone. Because the watch is “unlocked” when paired to its iPhone, users won’t need to authenticate each purchase.
“If I took my watch off and gave it to you, it would know and no longer work,” Cue said. “If I wanted to pay right now, I could pay with the watch and not have to take the phone out of my pocket.”
Apple has emphasized security as an advantage of paying with Apple Watch, explaining that each time you pay using a physical card, all your information is on display. Apple Watch, on the other hand, only shows the last four digits of your card number.
Contrary to this security claim, Apple Pay was recently hit by a wave of fraudulent payments using stolen data, according to the Wall Street Journal. These fraudsters haven’t actually hacked Apple’s system, instead relying on the low-tech approach of entering stolen information into an iPhone, allowing purchases to be made without the card’s physical presence.
These fraudulent purchases exposed Apple Pay to some bad press in early March, even though banks are actually responsible for verifying card information before it can be used with phones. Still, it exposed low-tech weaknesses in a high-tech security system.
If you’re interested in catering to the growing base of Apply Pay users, consider equipping your business with the necessary hardware. Find out how PayProTec can help by contacting us today!