Apple Pay, the most eagerly-awaited and widespread smartphone-based mobile payments system, launched today in some 220,00 brick-and-mortar stores in the U.S.
Apple’s new payment service, primarily via its newest devices, enable shoppers to buy items at these stores or inside apps using an iPhone and thumbprint.
Participants already aligned with Apple Pay service include McDonald’s, Whole Foods, Macy’s, Subway and Walgreen. The largest bank card issuers are on board as well, including JPMorgan Chase, Citi, Wells Fargo and Bank of America.
But will Apple Pay catch on with consumers, unlike competitors have been able to do, including Google Wallet, CurrentC and Softcard.
Apple Pay has its pros & cons, according to Cardhub.
No Need to Carry a Wallet:
You don’t have to carry around a bunch of credit and debit cards, giving consumers a little more freedom.
Apple Pay utilizes Near Field Technology (NFC), which is generally regarded as a very secure form of communication with a point-of-sale reader. It carries a range of only about four inches. Apple Pay does not actually store your credit card information in your phone or transmit this data to merchants. When you first enter in your card details, Apple Pay assigns the payment card a unique Device Account Number, which is stored in a secure computer chip in the phone and is used as a proxy for card numbers when you make a purchase. That means even if your phone is lost or stolen, no one will be able to get a hold of your credit card information. Furthermore, if you do lose your phone, you can remotely wipe the card information from your phone and thereby avoid having to get new cards from the issuers.
Apple does not collect information about what you buy, where you buy it or how much you pay for it. Merchants are even shielded from your identity for in-person transactions.
Limited Number of Merchants:
While 220,000 stores is a good starting point for the first crop of business equipped to accept payments via Apple Pay, that’s just 5 percent% of the total number of retail locations in the United States. So you on’t be able to use your phone as a form of payment everywhere you shop.
Only Available on Select Devices:
If you don’t have one of the newest Apple devices, then you won’t be able to use Apple Pay. The service is only available on the Apple iPhone 6, iPhone 6+, iPad Air 2, iPad mini 3, and the forthcoming Apple Watch.
Lose Your Phone, Lose Your Wallet:
Cardhub says Americans lose their phones once every 3.5 seconds, according to a report from the mobile security firm LookOut.
Battery Dies, Lose Your Wallet:
Cell phone batteries are improving, but we all know how fast a smartphone can run out of juice when you need it the most.
Incompatible with Store Credit Cards:
For now, store-branded credit cards cannot be used through Apple Pay. This will inevitably lead consumers not to use Apple Pay when making purchases through the cards provided by their favorite merchants.
Tendency to Overspend:
Some people tend to spend more when using a credit card because cash in not used. This tendency could be super-charged with a smartphone “wallet” like Apple Pay. In this case, you don’t even have to hand over your card to a merchant, swipe it yourself or even open your wallet; you just click and go, says Cardhub.