Apple Pay




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Apple Pay
Apple Pay logo.svg
Apple Pay on an iPhone and an Apple Watch
Apple Pay on an iPhone and an Apple Watch
Developer(s)Apple Inc.
Initial releaseOctober 20, 2014; 4 years ago
Operating systemiOS 8.1 or later
(iOS 10 or later for Apple Pay on the web)
(iOS 11.2 or later for Apple Pay Cash)
All watchOS versions
MacOS Sierra or later
Platform
LicenseProprietary
Website
Apple Pay is a mobile payment and digital wallet service by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web. It is supported on the iPhone, Apple Watch, iPad, and Mac. It digitizes and can replace a credit or debit card chip and PIN transaction at a contactless-capable point-of-sale terminal. Apple Pay does not require Apple Pay-specific contactless payment terminals; it works with any merchant that accepts contactless payments.It is very similar to contactless payments already used in many countries, with the addition of two-factor authentication via Touch ID, Face ID, PIN, or passcode. The service lets Apple devices wirelessly communicate with point of sale systems by using a near field communication (NFC) antenna, a "dedicated chip that stores encrypted payment information" (known as the Secure Element), and Apple's Touch ID and Wallet.
It is available in the United States, United Kingdom, Canada, Australia, Brazil, United Arab Emirates, Saudi Arabia, Russia, China, New Zealand, Singapore, Japan, Taiwan, Hong Kong, Germany, Denmark and most recently Austria, as well as various other European nations. Apple Pay supports most major credit card or debit card schemes, including American Express, Visa, Mastercard, and UnionPay. Participating banks vary by region.

Service

Device compatibility

The service is compatible with iPhone 6 and newer, iPad Air 2 and newer, Macs with Touch ID, and all Apple Watches. Users with the iPhone 5 and 5C can use the service through an Apple Watch, though it lacks Touch ID security. (The iPhone 5s has Touch ID but not NFC; iPhone 5s users must use an Apple Watch and confirm using Touch ID on the iPhone 5s.) Instead, Apple Pay is activated with a passcode and remains active for as long as the user wears the Apple Watch.It can store 8 or 12 cards depending upon the device.

Technology

Apple Pay uses the EMV Payment Tokenisation Specification.
The service keeps customer payment information private from the retailer by replacing the customer's credit or debit card Primary Account Number (PAN) with a tokenized Device Account Number (DAN), and creates a "dynamic security code [...] generated for each transaction". The 'dynamic security code' is the cryptogram in an EMV-mode transaction, and the Dynamic Card Verification Value (dCVV) in a magnetic stripe data emulation-mode transaction. Apple added that they would not track usage, which would stay between the customers, the vendors, and the banks. Users can also remotely halt the service on a lost phone via the Find My iPhone service.
To pay at points of sale, users hold their authenticated Apple device to the point of sale system. iPhone users authenticate by holding their fingerprint to the phone's Touch ID sensor or facial recognition via Face ID, whereas Apple Watch users authenticate by double clicking a button on the device.To pay in supported iOS apps, users choose Apple Pay as their payment method and authenticate with Touch ID or Face ID. Users can add payment cards to the service in any of four ways: through the payment card listed on their iTunes accounts, by taking a photo of the card, being provisioned from within the card issuers app, or by entering the card information manually.
Although users receive immediate notification of the transaction, the Apple Pay system is not an instant payment instrument, because the funds transfer between counterparties is not immediate. The settlement time depends on the payment method chosen by the customer.
In the United Kingdom, payments using contactless cards are limited to £30 (previously £20 until August 2015) as they have only one-factor authentication. Payments using Apple Pay have two-factor authentication and no transaction limit once retailers have upgraded the software in their terminals to support the latest network contactless specifications.
Apple assumes some liability for fraudulent use of the service. Banks are expected to carry the burden of the service, and Apple is said to have negotiated smaller transaction fees. In turn, the banks hoped to capture purchases that were formerly handled without credit  Financial Times reported that Apple receives 0.15% cut of US purchases made with the service, but, following the UK launch, reported that Apple's cut is much lower in the UK. This is largely because Regulation (EU) 2015/751 capped interchange fees in the European Economic Area at 0.3% for personal credit cards and 0.2% for personal debit cards with effect from June 8, 2015.In Russia, Apple receives 0.05% for debit cards and 0.12% for credit cards of each purchase, in addition, the bank pays 45 rubles a year for each card added in the service.

Consumer Device Cardholder Verification Method (CDCVM)

In EMV-mode transactions, Apple Pay supports the use of the Consumer Device Cardholder Verification Method (CDCVM) using Touch ID, Face ID or the phone's or watch's passcode. The use of CDCVM allows for the device itself to provide verification for the transaction and may negate the requirement for the cardholder to sign a receipt or enter their PIN. Additionally, in certain markets which have a 'no verification contactless limit' using contactless cards (such as the current £30 limit in the United Kingdom and the C$100 limit in Canada), the use of CDCVM can enable merchants to accept transactions higher than these amounts using Apple Pay, providing their terminal software is updated to support the latest network contactless specifications.

Global acceptance

Apple Pay implements the Contactless EMV standards from the major payment card networks and should work at any merchant that supports contactless payments worldwide, regardless if they specifically advertise Apple Pay acceptance or if Apple Pay support is offered by card issuers in that country. However, due to provisioning differences between countries (and even between issuers), users may encounter acceptance issues when travelling to a different country. Some current known issues include:


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