A:

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.

RELATED FAQS
  1. Who are Apple's main competitors in tech?

    Explore Apple's competitive position in the many industries in which it operates. Learn about the different products and ... Read Answer >>
  2. Can you pay off your Best Buy credit card in store?

    Learn how you can pay your BestBuy credit card in stores using cash or check. You can also pay by mail, online or over the ... Read Answer >>
  3. 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. 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.
  3. 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?
  4. 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.
  5. Investing

    Services to Exceed 33% of Apple Gross Profit by 2020: Credit Suisse

    A deep dive into Apple's Services business predicts a doubling of revenues from current levels.
  6. Tech

    Is This the End of Apple's Growth Era? (AAPL)

    Find out why Berkshire Hathaway made an uncharacteristic purchase of Apple stock and whether it implies Apple is no longer perceived as a growth stock.
  7. Investing

    The Key To Apple's Scale? Half A Billion iPhones

    Since 2000, Apple has grown into a $610 billion company with a market cap larger than the GDP of all but 20 countries. Just how did that happen so quickly?
  8. Insights

    Apple, Square Announce New Payments Partnership (AAPL, SQ)

    Combined, both services give consumers better, more secure options than they currently had with credit and debit cards, the executives said.
  9. Investing

    Apple Will Market Perform With iPhone 6s (AAPL)

    Historically, Apple’s S-cycles have had a lower year-over-year growth than non-S cycles, and the 6S cycle could see a slowing on a units per carrier basis.
RELATED TERMS
  1. Apple Pay (AAPL, GOOG)

    Apple Pay is a payment system that allows users to pay for products ...
  2. Cash Back

    Cash back generally refers to a cardholder benefit offered by ...
  3. Cardholder Agreement

    A cardholder agreement is a document given to credit card holders ...
  4. New Balance

    The new balance is the sum of the previous balance, payments, ...
  5. Minimum Payment

    The minimum payment is the lowest amount of money that a credit ...
  6. Credit Card

    Issued by a financial company giving the holder an option to ...
Trading Center