Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods and services with cash or cards. Apple Pay is a free service that first became a standard feature on the iPhone 6 line, iPad Pro, iPad Air 2, iPad mini 3 and Apple Watch – the latter of which also enables capability in the iPhone 5 line when the two devices are paired.

Apple Pay Safety

In short, when questioned on its safety, Apple Pay seems to easily pass all of the tests. For starters, Apply Pay utilizes the fingertip touch ID technology to verify transactions. In addition, the system does not provide the cardholder's information directly to the merchant. Rather, Apple Pay employs a method of "tokenization" to process its payments. Instead of the typical account number transfer, the cardholder manually inputs her card information into the Apple Pay system, and the system converts, or rather replaces, the account number with detailed codes that can be easily transmitted between devices but are only used that one time. This greatly reduces any chance of a hacker gaining access to a cardholder's account by stealing the account number.

Apple has also incorporated a few other security measures into the system. If the user ever suspects or verifies insecure account activity, Apple Pay can be disabled through the iCloud system. Apple also guarantees its users it never shares card information across the Cloud, so while this means users have to manually enter their card information into each device separately, it also adds to the already extensive security measures.

  1. How is the minimum payment on a credit card calculated?

    Even when minimum payments are low, consumers should still aim to pay off credit card balances every month. Read Answer >>
  2. Can I use a prepaid credit card to pay bills or transfer money to other accounts?

    Learn how prepaid credit cards enable convenient bill payments and transfers. Explore different fees charged for such transactions. Read Answer >>
Related Articles
  1. Personal Finance

    How Does Apple Pay Work? (AAPL)

    Discover why more businesses and smartphone users are opting to participate in Apple Pay, a new, revolutionary mobile wallet program.
  2. Tech

    4 Ways Best Buy is Collaborating With Apple to Boost Revenue (BBY, AAPL)

    Look at Best Buy's strong collaboration with Apple, including the rollout of the Apple Watch at all 1,050 Best Buy locations and the store within a store concept.
  3. Investing

    Does Apple Have Another Winner in Apple Pay?

    Apple recently announced that its payment service accounts for 90% of the world's mobile transactions.
  4. Investing

    What Moves Apple's Stock Price? (AAPL)

    The iPod, iPhone, and iPad propelled Apple stock to new heights. The Apple Watch is yet unproven. What will drive stock prices in the next year?
  5. Insights

    Goldman and Apple to Launch a Joint Credit Card

    Goldman Sachs reported partnership with Apple on plastic payments aims to offset weakness in both companies' core businesses.
  6. Small Business

    The Story Behind Apple's Success

    The marketing helps, and the media and fan frenzy never hurt; but it is the quality of the products that drive Apple's success.
  7. Investing

    Apple’s Key Weaknesses

    While it seems that Apple is at the top of its game, several weaknesses have emerged that the company needs to address if it is going to stay on top.
  8. Investing

    Apple's 3 Key Financial Ratios (AAPL)

    Find out that even for Apple, not every financial ratio reveals all things positive, and how a particular ratio may point to potential future business changes.
  9. Insights

    Apple's First-Quarter Results: The Mother of All Earnings

    The fact that the market as a whole is becoming more realistic about Apple's growth can benefit the company long term.
  1. Apple iOS (AAPL, GOOG)

    Apple iOS stands for Apple iPhone Operating System. iOS is currently ...
  2. Additional Cardholder

    An additional cardholder is an authorized secondary user added ...
  3. Sales Draft

    A sales draft is a record created at the time a purchase is made, ...
  4. Cash Back

    Cash back generally refers to a cardholder benefit offered by ...
  5. New Balance

    The new balance is the sum of the previous balance, payments, ...
  6. Card Reader

    A credit card reader reads the the information on a credit or ...
Hot Definitions
  1. Business Cycle

    The business cycle describes the rise and fall in production output of goods and services in an economy. Business cycles ...
  2. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  3. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  4. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  5. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  6. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
Trading Center