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September 12, 2014

How Will Apple Pay Change Mobile Payments?

Posted by Narayan Sivaram (View Profile | View All Posts) at 11:58 AM



Apple Pay is here to transform mobile payments [Source: http://www.youtube.com/watch?v=Om-YRgPtdZw]

So the much anticipated Apple's take on Mobile Payments, Apple Pay, has finally arrived like a superstar on stage. It has taken the payment industry by storm through a cameo appearance alongside an impressive array of unveilings. According to Apple, it is as momentous as the Mac or iPod or iPhone launch from years past. With more than 800 million iTunes accounts, it has always been source of endless 'what-ifs' for the payments industry buffs. So we now have more clarity on Apple Pay to ruminate and to prognosticate.

Speaking of what we know, Apple Pay uses near-field communication (NFC) technology to complete payments with a wave. Also in the package, an inventive approach that doesn't require card information on the mobile device instead a digital token is stored. Even if the mobile phone is stolen, the card details are safe. The digital token resides on a secure element on the mobile device. This is clearly Apple doing what it does best. Other 'wallets' experiments have been listless at best. Among the many difficulties there was this pesky question of who controls the secure element - the carriers or the payment networks or the wallet provider. Well, not for Apple. They make the device and they control it.

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