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Apple Announces Apple Pay (Yahoo search)

September 09, 2014 02:45 PM Eastern Daylight Time
Transforming Mobile Payments with an Easy, Secure & Private Way to Pay
CUPERTINO, CaliforniaSeptember 9, 2014Apple today announced Apple Pay, a new
category of service that will transform mobile payments with an easy, secure and private way
to pay. Apple Pay works with iPhone 6 and iPhone 6 Plus through a groundbreaking NFC
antenna design, a dedicated chip called the Secure Element, and the security and convenience of
Touch ID. Apple Pay is easy to set up, so hundreds of millions of users can simply add their
credit or debit card on file from their iTunes Store account. Apple Pay will also work with the
newly announced Apple Watch, extending Apple Pay to over 200 million owners of iPhone 5,
iPhone 5c and iPhone 5s worldwide.

Apple Pay supports credit and debit cards from the three major payment networks, American
Express, MasterCard and Visa, issued by the most popular banks including Bank of America,
Capital One Bank, Chase, Citi and Wells Fargo, representing 83 percent of credit card purchase
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volume in the US.* In addition to the 258 Apple retail stores in the US, some of the nations
leading retailers that will support Apple Pay include Bloomingdales, Disney Store and Walt
Disney World Resort, Duane Reade, Macys, McDonalds, Sephora, Staples, Subway,
Walgreens and Whole Foods Market. Apple Watch will also work at the over 220,000 merchant
locations across the US that have contactless payment enabled. Apple Pay is also able to make
purchases through apps in the App Store.

Security and privacy is at the core of Apple Pay. When youre using Apple Pay in a store,
restaurant or other merchant, cashiers will no longer see your name, credit card number or
security code, helping to reduce the potential for fraud, said Eddy Cue, Apples senior vice
president of Internet Software and Services. Apple doesnt collect your purchase history, so we
dont know what you bought, where you bought it or how much you paid for it. And if your
iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that
device.

Apple Pay will change the way you pay. When you add a credit or debit card with Apple Pay, the
actual card numbers are not stored on the device nor on Apple servers. Instead, a unique Device
Account Number is assigned, encrypted and securely stored in the Secure Element on your
iPhone or Apple Watch. Each transaction is authorized with a one-time unique number using
your Device Account Number and instead of using the security code from the back of your card.
Apple Pay creates a dynamic security code to securely validate each transaction.

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JPMorgan Chase has been pleased to collaborate on Apple Pay to create a better, faster and
safer payments system, which puts the customer first, creating an exceptional customer
experience for consumers and merchants. Everyone wins, said Jamie Dimon, chairman and
CEO, JPMorgan Chase & Co.

Were providing our customers with tools to make their financial lives better, including our 30
million digital banking customers, said Brian Moynihan, CEO of Bank of America. For them,
better means simple and convenient. Apple Pay is another exciting move in that direction.

Apple Pay is the kind of innovative thinking that brings the worlds of online and offline
commerce closer together, said Ken Chenault, CEO of American Express. Were excited to
work with Apple to offer Card Members and merchants a simple and secure way to make
purchases in stores and on apps.

Online shopping in apps with iPhone is also as simple as the touch of a finger. Users can pay for
physical goods and services including apparel, electronics, health and beauty products, tickets
and more with Touch ID. Checkout can happen with a single touch, so theres no need to
manually fill out lengthy account forms or repeatedly type in shipping and billing information,
and card details are kept private and are not shared with the online merchant. For example,
quickly order grill accessories for a backyard BBQ from the Target app, easily request a ride
with Uber without having to create an account first or avoid the lunch line by using Rapid Pick-
Up and paying ahead in the Panera Bread app. Simply make your selection and when ready to
buy, use Apple Pay to complete the transaction.
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Starting in October, with iPhone 6 and iPhone 6 Plus, Apple Pay will be available in the US as a
free update to iOS 8. Apple Pay will work in stores with iPhone 6, iPhone 6 Plus and Apple
Watch. Apple Pay APIs will be available to developers in iOS 8 so they can enable purchasing
physical goods within their apps on iPhone 6 and iPhone 6 Plus.

*American Express, Bank of America, Capital One Bank, Chase, Citi and Wells Fargo at
availability with additional banks coming quickly thereafter including Barclaycard, Navy Federal
Credit Union, PNC Bank, USAA and U.S. Bank.

Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork
and professional software. Apple leads the digital music revolution with its iPods and iTunes
online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App
Store, and is defining the future of mobile media and computing devices with iPad.


2. In summary, Apple Pay is the kind of innovative thinking that works on mobile
devices using near-field communication technology (NFC) .Apple Pay supports credit
and debit cards from the three major payment networks, American Express, MasterCard
and Visa, issued by the most popular banks the United States including Bank of America,
Capital One Bank, Chase, Citi and Wells Fargo. The concept is to be able to make
payment at stores with mobile device, and then use Touch ID to complete the purchases;
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thus, protecting the 16 digit credit card details. Cashiers will no longer see your name,
credit card number or security code, helping to reduce the potential for fraud. It can be
deduced from this article that Security and privacy is at the core of Apple Pay.
3. Apple Pay and The New World of Mobile Digital Credit Cards (Search engine:
Google search)
(Nat Kerris,
Business Wire)
Amid the extravaganza of the Apple Watch and iPhone product launch this week, Apple also
unveiled Apple Pay a new mobile digital payment system, which is being touted by some as
death for the plastic credit card.
By registering your MasterCard, Visa, and American Express cards to your Apple Pay wallet
through iTunes, you will be able to use your Apple mobile phones to make easy and secure
mobile payments to merchants.
The payment system uses a one-time transaction-specific dynamic security code meaning your
actual credit card number never gets transferred to the merchant and reduces the chance of fraud.
Lots of information around implementation remains to be seen. However, the Apple pay system
does boast early support by major credit card companies and banks.
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Apple is using short-range radio waves technology known as NFC (near-field communication),
in both its smart watch and the new iPhones in support of the application. NFC has been a
feature in many other smartphones (including by Google) but has failed to take hold to date.
Market researcher Gartner, estimated NFC was used for just 2% of total mobile payments last
year, though expected to nearly double to $8.2 billion this year. Up until now, analysts say banks
couldnt see a business case for NFC instead of simply issuing their own smart cards.
Smart cards aka EMV cards (an acronym for Europay MasterCard and Visa) are revamped credit
cards with microchips that store your data on the card. This approach also limits the retailer from
holding your data; data resides on your card and the embedded microprocessor chip encrypts
transaction data differently for each purchase.
The catch with the chip cards, until now, is that most retailers dont have the technology for them
yetBut that is also expected to change quickly. Wal-Mart is already there. Major retailers like
Target and Home Depot have announced plans to roll out the EMV payment systems. I just
received replacement Amex card with the EMV technology.
(BTW, in other related news, Home Depot revealed this week that its payment systems had been
hacked, possibly compromising customer data over its 2,000+ outlets in the U.S and Canada.
This is potentially a bigger data breach than the one that unfortunately befell Target last
December.)

USATODAY 3:24 p.m. EDT September 10, 2014
Will Apple Pay be safer than credit cards? (Search engine: Bingo search engine)
Apple hopes to jump-start mobile payments with Apple Pay. Apple Pay is meant to replace your
wallet with something that's both easier to use and more secure. As Apple CEO Tim Cook told
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an auditorium of fans in Cupertino, Calif., on Tuesday, "We're totally reliant on the exposed
numbers and the outdated and vulnerable magnetic stripe." To move away from "this little piece
of plastic" as Cook called credit cards, Apple Pay uses a proprietary payment system that creates
a one-time payment number for each purchase. It all happens on the iPhone 6. Users need only
wave or touch their phone near a reader, then input a PIN or their fingerprint. That makes Apple
Pay more secure than today's credit cards because it's effectively the same two-step chip-and-
PIN credit card system that Europe and Canada already use, said Rob Sadowski, Director of
Technology Solutions for security company RSA. Chip-and-PIN cards contain a computer chip
with encrypted financial information on them. For each sale, the chip generates a one-time
authorization code. Payment can't move forward unless it is authorized by the user, who inputs a
PIN. Considered safer than having the information encoded on the magnetic strip on the back of
a credit card, chip and PIN cards are supposed to be rolled out in the United States by 2015. A
physical card doesn't need to be handed over because data about the transaction is transmitted
from the phone to the point-of-interaction using a near-field communications (NFC) antenna
built into the top of the new models. NFC is a set of standards that allows phones to talk to each
other by radio when they are either right next to each other no more than an inch or so apart
or touching. However, users needn't worry they might bump into a reader and suddenly find
they've bought a new television, said Ed McLaughlin, chief emerging payment officer for
MasterCard. "It won't work unless you validate it you say yes, you want this transaction to
happen either with your PIN or your fingerprint," he said. That means cash registers could be
a thing of the past. "You'll be able to buy in the aisle," said McLaughlin. If a phone is stolen,
users don't have to worry that the thief could go on a spending spree, Cook said. The same
technology that allows a user to track or shut down a wandering phone can also be used to shut
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down Apple Pay. In addition, crooks can't get at the financial information that Apple Pay uses
because it's stored on what Apple terms a "secure element" on the phone. That's a special area
of secure encrypted storage controlled by the phone's operating system, said Sadowski. "It would
only be available to certain trusted applications and not readable by normal apps or someone
who stole the phone," he said. Because a credit card is never handed over, the store clerk never
sees the shopper's name, address or financial information. Taking the clerk out of the transaction
closes one gap, "but if there's anything we've learned it's that introducing a new technology
generally shifts the attack somewhere else," said Geoff Webb, with computer security company
NetIQ in Houston. All of these things might make the iPhone 6 more secure, but security experts
are not known for their Pollyanna-ish outlooks. It still won't be perfect, said Tom Gorup,
security operations center manager with Rook Security, Indianapolis-based security consulting
company. Attackers and researchers will poke and prod at this implementation until a hole is
found," he said.

After running my search words ("apple pay mobile technology credit card security &
privacy") on the two search engines above, I strongly believe Bing search engine is better
than the Google search engine. The Bing search engine produced 43,900,000 results
based on my search word; on the other hand, the Google search engine gave 37,800,000
results. However, they both offer their best result but Bing offered a wider range of
results.

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4. TRAAP
Time: The first article above (Apple Pay and The New World of Mobile Digital
Credit Cards) was written on Friday September 12, 2014. The second article (Will
Apple Pay be safer than credit cards?) was written 3:24 p.m. EDT Wednesday
September 10, 2014; however, but articles hasnt been updated yet.
Relevance: Theyre both related to the topic and also very relevant, they both talked
about the innovation in mobile technology in making payment instead of using
credit cards; as a result promoting security and privacy.
Authority: The article (Apple Pay and The New World of Mobile Digital Credit
Cards) was written by Judith Bitterli is AVGs Chief Marketing Officer. Shes
eligible to write the article based on her 25 years experienced with AVG; an online
security company providing leading software and services to secure devices, data
and people. The second article (Will Apple Pay be safer than credit cards?) was
written by Elizabeth Weise works. Elizabeth works in USA Today's San Francisco
bureau, where she's covered tech, biotech, and breaking news.
Accurate: The articles are, of course, authentic. The two articles are both products of
AVG technologies and USA Today and theyre both reliable sources. In addition,
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the articles both refer to the main company and the accuracy has been tested by Wal-
Mart and more company is asking for the service already.
Purpose: The articles are both written to inform individuals, of the latest innovation
in mobile technology that boost the privacy and security of credit cards. However, i
believe there is a bias with the service. The article (Apple Pay and The New World
of Mobile Digital Credit Cards) stated "NFC has been a feature in many other
smartphones (including by Google) but has failed to take hold to date." I consider
this a biased statement.
5. scholarly journal article Why Plastic Cards Will Survive Apple Pay
The debut of Apple Pay has far-reaching implications for the future of the U.S. payments
system and has cast a bright light into a murky mobile wallet payments environment.
Some may even wonder if Apple Pay is in fact poised to eclipse plastic card payments.

As the digital payment card era unfolds, we can take a moment to look at the pre-Apple
Pay environment - as measured in an August 2013 survey of 4,200 households by
Phoenix Marketing International. There are several reasons why the end of plastic
payment cards is nowhere in sight.

First, it is well-known that a very small percentage of merchant terminals (estimated at no
more than 5%) currently accept near-field communication payments, in which two
devices placed at close range perform transactions via a wireless connection. Moreover, a
significant portion of consumers are wary about the security of NFC transactions.
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Twenty-two percent of smartphone owners who have not used a mobile payments app
said that "tapping a phone against a merchant terminal" was a major security concern.

While smartphones are certainly on the rise, they are not yet ubiquitous: 65% of
households currently own one. That leaves more than a third of households for whom
mobile wallets, in general, are currently not an option.

Apple Pay's impact will also be limited by the fact that Android phones are more
prevalent; less than half of smartphone owners have an iPhone. And nearly half of
smartphone owners say they are unlikely to use a smartphone application for in-store
payments. Among users who have yet to use a mobile payment app, 48% said that they
were uninterested in using one, 38% were neutral, and just 14% said that they would be
likely to adopt it.

Lastly, while Apple enjoys a strong reputation, some Americans may not be willing to
trust them to facilitate their transactions. Last year, 22% of smartphone owners indicated
they would consider a mobile payment from Apple. A similar number (17%) said they
would go with Google, but banks (72%) and PayPal (41%) were far more popular picks.

The Apple Pay announcement heralds the likelihood of substantial increases in NFC-
ready terminals. Since it coincides with current merchant investments in EMV-
compatible terminals, merchants are more likely to make sure the upgrades include NFC
compatibility. And Apple Pay's fingerprint identification and tokenization technology
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will help reduce consumer NFC security concerns. Nevertheless, there is still a long way
to go before scale can be achieved.

It is important to emphasize that Apple Pay brings direction and credibility to the NFC
marketplace and demonstrates NFC's future viability. That leaves the door open for other
NFC wallets, such as Softcard and Google, to expand - and for entrants to increase the
competition. At the same time, it should be noted that NFC technology is more than 20
years old. It may ultimately be deemphasized in favor of newer consumer-preferred
technologies.

History suggests that plastic payment cards will remain viable for a long time to come,
even as the use of digital payment cards escalates over the next decade or two. Just look
at the bill payments industry: while the incidence of online bill pay is high, consumer
research shows that it will never reach 100%. And a high percentage of people who pay
bills online still pay some of them using paper checks. When it comes to payments, old
habits die hard. Greg Weed is director of card performance research for Phoenix
Marketing International.
scholarly journal article Why Apple Pay Is Only a So-So Deal for Banks
Depending on who you ask, the launch of Apple Pay was either exciting or uninspiring.
The truth is far more complicated - particularly in terms of how it will impact the
dynamics of Apple's relationship with banks.

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I would venture that most of the financial institutions on stage at the launch of Apple Pay
earlier this week have mixed feelings about their partnership. They have had to sacrifice a
lot of the room for negotiation that banks have retained with other wallet players such as
Google Wallet and Softcard (the company formerly known as Isis). If you are an Apple
Pay launch partner, having your credential or token on Apple Pay does not mean that you
get to extend that credential into your own mobile banking app or wallet. For example,
Bank A, with its credentials stored on Apple Pay, cannot leverage those credentials so
that its own mobile banking app can use them to enable direct payments. Banks will have
to accept that their credentials will be indefinitely locked to Apple Pay till deletion.

No bank wants its brand to be overshadowed by Apple, nor do banks want smartphone
users to close their app and open up a different wallet to make a payment. But this was
not up for debate with Apple, which wants to tightly control the payment experience.
This should be a cause of concern for Apple Pay partner banks, for whom enabling
payments outside of Apple Pay in iOS is now off the table.

Banks' only hope of having an integrated payment experience is to focus on Android,
which supports host card emulation technology. HCE uses software to emulate a
contactless smart card and communicate with near-field communication readers. I would
expect a lot of banks to revisit Android and HCE in upcoming months. That goes double
for the institutions that were not chosen to partner with Apple, along with retailers who
have not rejected contactless payments as a modality in stores.

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Given that Apple will reportedly collect fees from its partner banks when customers
execute transactions on the mobile wallet, all banks should be thinking about ways that
they can make their presence on other Apple offerings more lucrative. If I were them, I
would begin segmenting customers who hold one of iTunes' 500 million active accounts
to see which ones are affluent spenders and which cards have higher interest rates, then
implement targeted customer incentive strategies to move Apple users to higher-rate
cards. I would use the same tactic to convince customers to replace debit cards on file
with iTunes with credit cards.

But the big takeaway is that from here on out, banks can only gain incremental value
from iOS. If they want to create a unified payment system that customers can use as part
of their existing banking relationships, they'll have to focus on Android. Should that
happen, I doubt that Apple could prevent such moves from diluting its merchant value
proposition. But such moves on the part of issuers are hardly long-term strategies to
incentivize frequent usage, merchant participation and overall customer value. Cherian
Abraham is a mobile commerce and payments consultant at Experian Decision Analytics.

Data base used: LexisNexis Academic and I must confess it gave data information
more structured so it can be find quickly also its efficient because it gave several
journal article based on my search.

6. The internet articles have quite a lot of result on my search; however, some of the
article is not related to the search. Although its easier to access and also faster. On the
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other hand, the journal articles are written from a more reliable and reputable sources. For
example, the journal article Why Apple Pay Is Only a So-So Deal for Banks was
written by Cherian Abraham a mobile commerce and payments consultant at Experian
Decision Analytics.



















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References
APA Format
Works Cited
Abraham, C. (2014). Why Apple Pay Is Only a So-So Deal for Banks. 8-540.
Bitterli, J. (2014). Apple Pay and The New World of Mobile Digital Credit Cards. AVG Technologies.
Nat Kerris, T. M. (n.d.). Business Wire. Retrieved September 26, 2014, from Wire Businesswire.com:
http://www.businesswire.com/news/home/20140909006536/en/Apple-Announces-Apple-Pay
Nat Kerris, T. M. (n.d.). Business Wire. Retrieved September 26, 2014, from Businesswire.com:
http://www.businesswire.com/news/home/20140909006536/en/Apple-Announces-Apple-Pay
Weed, G. (2014). Why Plastic Cards Will Survive Apple Pay. 7-541.
Weise, E. (2014). Will Apple Pay be safer than credit cards? USA Today.