Apple is taking mobile payments a step further today – the newly unveiled iPhone 6 will include Apple Pay, a mobile payments system for new smartphones and the Apple Watch.
According to Apple CEO Tim Cook, the application stores users’ payment information with software encryption in the company’s Passbook app, transmitting a one-time payment number and security code to near-field communication (NFC) terminals, authorized by the user’s fingerprint verification, instead of a credit card number.
Cook, who called the current credit card payment system in the U.S. "fairly antiquated process," said in the Tuesday media presentation that "We're totally reliant on the exposed numbers and the security codes that all of us know aren't secure. It's no wonder that people have dreamed of replacing these for years. But they've all failed."
Within the U.S., Apple says that major credit card companies Visa, Mastercard and American Express are on board, and the Tuesday press conference stated that Citi Bank, Bank of America, Capital One, Chase and Wells Fargo are all partners. McDonalds, Staples and Whole Foods are adding Apple Pay to payment options. In total, the presentation says, Apple Pay will be accepted at more than 200,000 merchants, and will integrate into third-party applications, such as Target and Groupon.
If a phone is lost, payments can be suspended through the “Find My iPhone” service, the company said.