Apple had an action-packed day in Cupertino where it unveiled two new iPhones and its first wearable, the Apple Watch. The event was also significant as Apple used the big stage to delve into a category they've purposefully neglected for years: mobile payments.
Apple Pay is the Cupertino-based company's answer to mobile payments. Using the Passbook app, consumers will be able to use their NFC-equipped iPhone 6, iPhone 6 Plus or Apple Watch to pay for all sorts of goods and services at retail and online.
The service doesn't store credit / debit card data locally, instead only giving merchants a one-time payment number and a dynamic security code to complete the transaction. In the event of a lost or stolen iPhone, all payment services can be suspended remotely using Find my iPhone. Better yet, users won't have to cancel their card because again, sensitive payment details aren't stored on the device.
Apple's Eddy Cue spent a few minutes covering privacy concerns, noting the company won't have access to information about what a user buys, where they bought it or how much they paid for it.
As anticipated, Apple has teamed up with American Express, MasterCard and VISA in the US as well as all six of the big national banks (American Express, Bank of America, Capital One, Chase, Citi and Wells Fargo). Collectively, that accounts for more than 80 percent of the US credit card purchase volume according to Apple.
More than 22,000 retailers are also working with Apple Pay including Macy's, Duane Reade, Starbucks, Whole Foods, Disney, Staples, Subway, Walgreens and McDonald's, just to name a few. At McDonald's, for example, customers will be able to use Apple Pay in the drive-thru.
Shoppers will even be able to use Apple Pay for one-touch online purchases in conjunction with services like Uber, Groupon and OpenTable.
It's unclear if Apple will be able to jumpstart the stagnant mobile payments industry although having another major player onboard can't hurt its chances. Look for Apple Pay to launch sometime next month.