Although one of the big new features of iOS 8 and the iPhone 6 and iPhone 6 Plus, Apple Pay, the company’s own payments system, was only available in the US. From the start of July, it comes to the UK, where it will arguably make a bigger impact: our stores have largely got the infrastructure required by the system. Here’s everything you need to know about Apple Pay, including how to get it, how to use it and any limitations.
What is Apple Pay and how does it work?
Apple Pay is lets you use your iPhone to pay for goods and services. It can be used in-store, provided there are NFC contactless card readers, and for in-app purchases. To fund your purchases, you have to store your existing credit and debit cards in Passbook (soon to be called Wallet in iOS 9), and money is taken out of these accounts. That’s similar to how PayPal works: you can bay for goods using PayPal, but the money is debited from your linked accounts; however, Apple Pay is much more convenient and flexible, as it works in the real-world in a larger number of shops.
How do I use it?
First, you need to associate at least one card with your Apple Pay account, which can be a debit or credit card. The card's issuer must support Apple Pay. Most UK banks do, bar Barclays, and Mastercard, Visa and American Express all support it. To use in store, you need a shop that has a contactless card reader (look out for the contactless logo) and a device with an NFC chip in it (iPhone 6, iPhone 6 Plus, and the Apple Watch). The store must also support the credit card type that you're trying to use: you can't use American Express, for example, in shop that doesn't normally take it.
Using your iPhone, you just hold your finger over Touch ID and tap the phone to the card reader; with the Apple Watch, you have to pair it with a compatible phone (iPhone 5, iPhone 5c, iPhone 5S, iPhone 6 or iPhone 6 Plus). You just double-click the side button and hold the Watch up to the reader.
To make in-app purchases, you must have an iPad Air 2, iPad Mini 3, iPhone 6 or iPhone 6 Plus. Payments are authenticated via Touch ID. The table below, taken from Apple’s website, shows you compatibility between the different phone and iPad models.
Is it safe?
Completely. In fact, it’s arguably safer than using your real credit card. Rather than storing your credit card details, a unique Device Account Number is assigned, encrypted and saved in the Secure Element chip in the iPhone, iPad and Apple Watch. When you make a purchase, your Device Account Number is used in conjunction with a transaction-specific code, so you never reveal your credit card’s full details. This means that your card can’t be cloned or the details noted down by a dodgy shop.
Transactions are also protected by Touch ID, which means that they're made in a secure way. This is a big improvement on normal contactless, where's there's no security at all: anyone with your credit card can make a payment. Using the Apple Watch doesn't require your fingerprint, but the Watch has to be paired to your phone. In other words, if somebody wanted to use your Apple Pay account, they'd have to steal your phone and your Watch and keep them in pairing distance.
In addition, if your phone is lost or stolen, you can use Find My iPhone to turn off Apple Pay, so your phone definitely can’t be used to pay for anything. Even better, you don’t have to cancel your cards, as they can’t be used via Apple Pay.
What’s the transaction limit?
While normal contactless payments have a transaction limit of £20 (rising to £30 in September 2015), Apple Pay shouldn’t have any limits, as the transactions are more secure and have to be authenticated.
“There is no transaction limit,” Visa explained to us. “This is because the authentication acts similarly to PIN.”
However, the reality is that contactless terminals are set to allow a maximum transaction of £20. For higher limits to apply, it will require retailers to support Apple Pay and increase the amount that can be spent. That means that most people will encounter a £20 cap at launch, although some stores will increase the limit after launch.
Where can I can use Apple Pay?
As we said, it should work with any shop that has a contactless card reader, even those that don’t directly support it, such as Tesco and Sainsbury’s. This is because Apple Pay uses the normal contactless system. Higher limits, as we said above, will need to be supported in-store. Companies that have signed up to Apple Pay include Waitrose, Marks & Spencer, BP, Dune, Boots and Wagamama. You can also use it for contactless payments on the Tube. Apple has said that 250,000 locations in the UK will support Apple Pay, but expect this to grow rapidly.
