Apple Pay: Yes or No?

[AllieNeko]

I'm still not sure we're talking about the same thing. I have a Visa credit card, and I have entered the same card into Apple Pay. The card, like most in the U.S., does not have tap. It's swipe only. At the grocery store I shop at (being the closest to my home) I can swipe my Visa card through the magnetic reader, and it works. The check-out lady said they do accept some forms of mobile payment, but with Apple Pay on my phone, I was unable to pay. So she made a phone call and told me that their store does not yet accept Apple Pay. She has seen people pay with their phone, but she could not tell what sort of phone, or what payment service they had.

Apparently, the stores make individual contracts with each different mobile payment service. So as an example, they might accept Google Wallet but not Apple Pay.

Since I carry my card in my shirt pocket, it's actually easier for me to swipe my card than to pull out my phone, double-click the home button, put my finger on the ID reader, and hold the phone up to the machine. The trade-off is that presumably Apple Pay is safer.

Stores have no contracts with these providers except for marketing. I imagine the people who paid with their phone at that store were using Samsung Pay which can transmit using a magnetic field to the magnetic stripe reader.

Apple Pay and Android Pay use contactless card emulation and should work wherever a contactless card works (barring random compatibility issues, as I noted). Look for the EMVco contactless logo, one solid green light (or on screen depiction of a light), or the phrase "tap card" to know where you can use Apple Pay and other contactless card products. Unfortunately, this isn't a guarantee for various reasons. CVS, for example, has enabled contactless readers with the EMVco logo and a solid green light but when you tap you get a contactless not allowed message (it used to work, but they disabled it when Apple released Apple Pay to keep people from using Apple Pay). Toys R Us and H&M display the logo and the tap card wording but when tapped prompt for a card insert because their terminals are misconfigured and do not support EMV contactless. They may work with some cards in Apple Pay, I've only tested with physical contactless cards. Apple Pay sometimes, especially for AMEX, is setup to use an older contactless tech that may work. Testers wanted. Toys R Us worked perfect until they enabled EMV.

These compatibility issues have nothing to do with contracts though (except when they block all contactless intentionally like CVS), and everything to do with hurried, badly designed, amazing-it-got-certified terminal software.

 

[daniel1948]

I'm learning stuff today! So in addition to the magnetic-strip cards (which predominate in the U.S. and is what I have) and chip cards (which I don't have but I know about) there are actually contactless cards, and ApplePay emulates those. This is new to me.

And according to the two posters above, Samsung works at magnetic-strip readers, which is why the lady at the grocery store said that some folks hold their phone up next to the magnetic-strip reader. Obviously, this requires the phone to have different hardware. I agree that Apple should have implemented this, given the dearth of contactless readers here. Maybe it was an issue of space: The iPhone SE is very small: not a lot of room for hardware.

Thanks to both of you for teaching me something new.

 

[mantan]

I'm learning stuff today! So in addition to the magnetic-strip cards (which predominate in the U.S. and is what I have) and chip cards (which I don't have but I know about) there are actually contactless cards, and ApplePay emulates those. This is new to me.

And according to the two posters above, Samsung works at magnetic-strip readers, which is why the lady at the grocery store said that some folks hold their phone up next to the magnetic-strip reader. Obviously, this requires the phone to have different hardware. I agree that Apple should have implemented this, given the dearth of contactless readers here. Maybe it was an issue of space: The iPhone SE is very small: not a lot of room for hardware.

Thanks to both of you for teaching me something new.

I think it was a rare case of Samsung beating Apple to the punch. Apple pushed Apple Pay based on technology that was coming (move to C&P and theoretically contactless payments). What they may have underestimated was how the retail industry was going to go kicking and screaming into that arena. And how slow consumers are to embrace/push for safer technology. Despite the tens of millions of consumers having their data repeatedly compromised over the past few years, there isn't a big push from consumers to move away from the MST to a more secure transaction.

The EMV terminals were supposed to alleviate that, but you here a lot of people talk about how clunky the interface is and how much longer the transaction takes.

Samsung Pay is good in that it bridges the idea of electronic payments under the old and new system. That helps build the habit that using your phone to pay can be a quick and easy transaction that you can do ANYWHERE. The downside to Apple Pay is that it's only available at a few places and we 'hope' it works at other places. Anybody who's sheepishly tried to get their phone to work at an terminal with an NFC logo...then have to pull out their card knows how silly it feels.

I imagine a lot of folks are like my wife. She has it loaded and used it once...at a vending machine. Then forgot about it. She since it's only accepted a few place, it seems like more trouble than it's worth to her.

Hopefully it finds its footing and starts to grow. A big step would be offering MST functionality with the 7.

 

[AlecEdworthy]

I'm learning stuff today! So in addition to the magnetic-strip cards (which predominate in the U.S. and is what I have) and chip cards (which I don't have but I know about) there are actually contactless cards, and ApplePay emulates those. This is new to me.

In the UK our cards generally do all three - magstripe, chip and contactless. Most cards are all three, some older ones are still only magstripe and chip. Unlike the US we have very few which are chip and signature, most (except where there are accessibility issues for the card holder which make a PIN inappropriate) are chip and PIN plus contactless.

A

 

[daniel1948]

We are so backward here!

 

[mildocjr]

Apple Pay is great, my only complaint is that more merchants need to offer it.
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I'm learning stuff today! So in addition to the magnetic-strip cards (which predominate in the U.S. and is what I have) and chip cards (which I don't have but I know about) there are actually contactless cards, and ApplePay emulates those. This is new to me.

And according to the two posters above, Samsung works at magnetic-strip readers, which is why the lady at the grocery store said that some folks hold their phone up next to the magnetic-strip reader. Obviously, this requires the phone to have different hardware. I agree that Apple should have implemented this, given the dearth of contactless readers here. Maybe it was an issue of space: The iPhone SE is very small: not a lot of room for hardware.

Thanks to both of you for teaching me something new.

Yeah, you should have a chip card, all banks were forced to use the new method by the end of 2015. (this spun from the Target hack) If you don't have a chip card then you need to contact your bank and ask about it.

Apple Pay, Chip-and-Pin, and contactless payments all work the same, they basically generate a random valid card number that is good for one purchase and tie it to your bank account, lets say your card number ends in 1234, well it generates a card number that ends in 0152, kind of like a Visa pre-paid that only contains the exact amount needed for the purchase. If the generated card ever gets hacked after the transaction it's completely useless to the hacker. At the time of this writing the only ways that someone can get your card number are by magnetic strip which can be gathered at any time after the transaction or contactless payments with an NFC hacking tool which requires them to be within a few inches of your device as makes the transaction.

 

[AllieNeko]

Apple Pay is great, my only complaint is that more merchants need to offer it.
[doublepost=1459785267][/doublepost]

Yeah, you should have a chip card, all banks were forced to use the new method by the end of 2015. (this spun from the Target hack) If you don't have a chip card then you need to contact your bank and ask about it.

Apple Pay, Chip-and-Pin, and contactless payments all work the same, they basically generate a random valid card number that is good for one purchase and tie it to your bank account, lets say your card number ends in 1234, well it generates a card number that ends in 0152, kind of like a Visa pre-paid that only contains the exact amount needed for the purchase. If the generated card ever gets hacked after the transaction it's completely useless to the hacker. At the time of this writing the only ways that someone can get your card number are by magnetic strip which can be gathered at any time after the transaction or contactless payments with an NFC hacking tool which requires them to be within a few inches of your device as makes the transaction.

Both of these statements are completely untrue. One, banks aren't required to issue EMV cards and merchants aren't required to take them. The liability is just now on the least secure party so there's a strong incentive. Two, none of these technologies create one time use account numbers, though Apple Pay does use tokenised (multiple use) account numbers. Rather, they require a cryptogram (that is transaction unique) instead of the account number alone.

The account number can easily be gathered from the chip or stripe, but there isn't enough data on the chip (or contactless) alone to make a working card. Account number alone isn't enough.

 

[AlecEdworthy]

Both of these statements are completely untrue. One, banks aren't required to issue EMV cards and merchants aren't required to take them. The liability is just now on the least secure party so there's a strong incentive. Two, none of these technologies create one time use account numbers, though Apple Pay does use tokenised (multiple use) account numbers. Rather, they require a cryptogram (that is transaction unique) instead of the account number alone.

The account number can easily be gathered from the chip or stripe, but there isn't enough data on the chip (or contactless) alone to make a working card. Account number alone isn't enough.

The other security bonus of Apple Pay is that the account number used can be specifically listed as invalid if used through any mechanism other than Apple Pay (e.g. card holder not present, online, swipe, chip and PIN, normal contactless etc).

A

 

[mildocjr]

Both of these statements are completely untrue. One, banks aren't required to issue EMV cards and merchants aren't required to take them. The liability is just now on the least secure party so there's a strong incentive. Two, none of these technologies create one time use account numbers, though Apple Pay does use tokenised (multiple use) account numbers. Rather, they require a cryptogram (that is transaction unique) instead of the account number alone.

The account number can easily be gathered from the chip or stripe, but there isn't enough data on the chip (or contactless) alone to make a working card. Account number alone isn't enough.

Thank you for clarifying, although the government did make a push it was for government issued cards https://threatpost.com/obama-executive-order-forces-chip-pin-payment-on-government/108936/

 

[tmiw]

I use it almost everyday, especially since they've introduced contactless payments at the site where I work. They also seem to have got rid of all the glitches as I haven't had a failed translation in months. I do get the impression however that for some reason that, unlike here in the UK, it hasn't really taken off in the United States.

In the US, I get the feeling that EMV is still the major focus of many retailers. The majority of them still aren't ready to take chip cards. I think contactless payments will be a focus following that, and will grow like how it has in the rest of the world.

The US in general is very anti-contactless and US retailers very anti-card in general. I would not be surprised if it takes at least as long as it did for the UK to adopt contactless (~10 years from the time they adopted chip and PIN) for it to be commonly accepted, if not longer. Some retailers at the very least will want huge interchange fee concessions from Visa and MasterCard before they enable support in the hardware they already have. Of course, YMMV; at least in my area they aren't even bothering to train the smaller businesses on how to run Apple Pay despite them being the most likely to have it.

At least some of the terminals with chip support have gotten much faster. The other day I was at a takeout whose terminal was basically as fast as swiping +/- a second or two.

Apparently, the stores make individual contracts with each different mobile payment service. So as an example, they might accept Google Wallet but not Apple Pay.

That might be the case for marketing purposes but if one's supported, all of them should be. The underlying NFC protocol is the same.

 

[daniel1948]

Apparently, the stores make individual contracts with each different mobile payment service. So as an example, they might accept Google Wallet but not Apple Pay.

That might be the case for marketing purposes but if one's supported, all of them should be. The underlying NFC protocol is the same.

My statement above (which I later corrected) was based on my own misunderstanding: At my local grocery store, the checker told me that people were using phones to pay. But her supervisor told her that they don't take ApplePay. It was only after I posted the above, that I learned (from a later poster) that Samsung works with magnetic strip readers by making them think a card was swiped through, i.e., a totally different system than ApplePay, and that it does not require a contactless reader.

 

[iGeek2014]

I love using Apple Pay here in the UK. From the London Underground to buying my Apple Watch (plus Product Red strap) and to paying for my groceries at Morrison's.

I wish more places had contactless payments or those that are enabled already accepted Apple Pay for transactions over £30.00.

Although you are required to enter your PIN periodically for verification purposes I feel safer knowing my card details can't be shared (and ultimately) compromised.

 

[ecschwarz]

This is a really good place to start, daniel1948, for finding places that accept Apple Pay or allow it within their app: http://www.apple.com/apple-pay/where-to-use-apple-pay/

Apple wants ALL merchants to accept it because they make a few cents on every transaction. The problem is getting merchants to agree. Every payment method (cash, checks, each different credit card, each different mobile pay system) has its costs and requirements, and one more method means one more hurdle for the merchants.

One thing to note, Apple gets their cut from the issuing bank for the credit/debit card (so in the case of a Chase Visa card, Chase; Citi MasterCard, Citi; Amex or Discover usually use an internal subsidiary, etc.), so it doesn't cost the merchants any more than using a credit card. As it cuts down on chances for fraud, the banks see the tiny cut to Apple as a cheap bit of insurance (at least for now).

Since I carry my card in my shirt pocket, it's actually easier for me to swipe my card than to pull out my phone, double-click the home button, put my finger on the ID reader, and hold the phone up to the machine. The trade-off is that presumably Apple Pay is safer.

You don't need to double-tap the home button unless you want to "arm" your phone to pay ahead of time. If you hold a sleeping phone up to an NFC reader, it will light up, select your default card, and be ready for your fingerprint. The ability to use it ahead of time was added later to mimic the Apple Watch Apple Pay feature.
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I think it was a rare case of Samsung beating Apple to the punch. Apple pushed Apple Pay based on technology that was coming (move to C&P and theoretically contactless payments). What they may have underestimated was how the retail industry was going to go kicking and screaming into that arena. And how slow consumers are to embrace/push for safer technology. Despite the tens of millions of consumers having their data repeatedly compromised over the past few years, there isn't a big push from consumers to move away from the MST to a more secure transaction.

I think Apple sees magnetic stripe emulation a lot like any other legacy system, even if the reality is that it will be around for a bit longer. Additionally, the company that Samsung bought to incorporate the technology, Loop Pay, was actually for iOS at one point: http://www.theverge.com/2014/2/19/5425494/loop-wallet-mobile-payments-review

 

[tmiw]

even if the reality is that it will be around for a bit longer

I think a lot of people underestimate how much time it'll actually be around. It'll likely be a decade before nearly everyone is chip-enabled, and most of those businesses will probably not bother with NFC if trends continue as they are. If chip performance doesn't improve I can even see people reverting back to cash for small purchases instead of pushing for more retailers to support AP--and retailers would be perfectly okay with that, too.

And that's not even getting into how NFC/MST's not even usable at a lot of places despite being enabled simply because they're continuing their old/bad habits (e.g. restaurants and their hidden card terminals).

 

[AlecEdworthy]

I think a lot of people underestimate how much time it'll actually be around. It'll likely be a decade before nearly everyone is chip-enabled, and most of those businesses will probably not bother with NFC if trends continue as they are.

Perhaps that's how it'll be in backwater USA. Over here in Europe (the UK in particular) everywhere is chip enabled and only certain very big places (two of our largest supermarkets for instance - Tesco and Sainsburys - although the latter is due to roll it out soon) or some very small shops aren't contactless enabled now. Also pretty much anywhere that supports contactless now supports Apple Pay too (certain cards/issuers are still contactless only despite other cards working with Apple Pay at the same location however).

A

 

[tmiw]

Perhaps that's how it'll be in backwater USA.

It's not because we're a backwater, though not upgrading to support EMV until now doesn't help.

First, retailers really hate Visa and MasterCard here. If most people go back to using cash because chip is such a pain and there are no other options*, then retailers can justify going back to being cash-only (or at the very least, threaten to do so in exchange for much lower swipe fees--think nearly free even for credit). Then there are companies like Target that rely on data collection from card swipes/insertions and will never adopt AP in-store as long as it doesn't give them the same ability.

They also hate spending more money than they have to. Which is why when it became clear that the banks aren't going to require PIN on the new cards, a lot didn't bother spending extra on portable terminals or anything customer-facing. Which is fine if you're American, possibly not as much if you're visiting. Granted, this is more of a thing at smaller businesses than the major retailers.

Honestly, I see in-app use of AP becoming way more common and popular than in-store use, both because it's easier to data mine with the former and because stuff like mobile ordering/checkout probably shortens checkout times even more than just supporting NFC would (to the point where it would probably be worth the higher "card not present" fees).

*Americans in general are very wary of contactless payments, so the major banks aren't even going to bother having it on the physical cards by default any time soon lest there be an even bigger backlash. AP did help bring about some acceptance when everyone would otherwise have been okay with none, so there's that.

 

[neil_cm17]

It's not because we're a backwater, though not upgrading to support EMV until now doesn't help.

First, retailers really hate Visa and MasterCard here. If most people go back to using cash because chip is such a pain and there are no other options*, then retailers can justify going back to being cash-only (or at the very least, threaten to do so in exchange for much lower swipe fees--think nearly free even for credit). Then there are companies like Target that rely on data collection from card swipes/insertions and will never adopt AP in-store as long as it doesn't give them the same ability.

They also hate spending more money than they have to. Which is why when it became clear that the banks aren't going to require PIN on the new cards, a lot didn't bother spending extra on portable terminals or anything customer-facing. Which is fine if you're American, possibly not as much if you're visiting. Granted, this is more of a thing at smaller businesses than the major retailers.

Honestly, I see in-app use of AP becoming way more common and popular than in-store use, both because it's easier to data mine with the former and because stuff like mobile ordering/checkout probably shortens checkout times even more than just supporting NFC would (to the point where it would probably be worth the higher "card not present" fees).

*Americans in general are very wary of contactless payments, so the major banks aren't even going to bother having it on the physical cards by default any time soon lest there be an even bigger backlash. AP did help bring about some acceptance when everyone would otherwise have been okay with none, so there's that.

I'm guessing a big issue in the United States is the fragmented nature of the banking system with thousands of banks and credit unions, where as, here in the UK we have perhaps a dozen major banks. There also tends to be stronger regulation and standard setting here with organisations like the UK cards association. I read somewhere that in the U.S. there is a big difference in fees that retailers get charged for debit and credit cards where as here they are capped at a much lower level, which has had the effect of encouraging the use of cards for low value transactions that used to be done by cash.

 

[ecschwarz]

I'm guessing a big issue in the United States is the fragmented nature of the banking system with thousands of banks and credit unions, where as, here in the UK we have perhaps a dozen major banks. There also tends to be stronger regulation and standard setting here with organisations like the UK cards association. I read somewhere that in the U.S. there is a big difference in fees that retailers get charged for debit and credit cards where as here they are capped at a much lower level, which has had the effect of encouraging the use of cards for low value transactions that used to be done by cash.

It didn't help that contactless on cards never really caught on over here in the first place - a few cards were issued with the feature, but it seems inconsistent (some Amex cards have it, while others don't, although you can request it; some PNC debit cards had it, while it seems newer ones don't). Combine the average cardholder not ending up with a contactless card and not a lot of merchants having capable readers and there wasn't much use to begin with. Then, there's the "someone can skim your contactless card by standing next to you" fears that have come up (some people think this with Apple Pay, too), and everyone seems to favor the insecure magnetic stripe. The funny part is that most credit cards (and debit cards if run as credit) offer fraud protection that favors the customer in most instances, making the fear seem even sillier.

Already with the liability shift, people haven't taken the time to educate themselves and instead I hear more grumbling and complaining about the time it takes to authorize a card with an EMV chip. Usually it's something along the lines of "they're changing it for the sake of change" or other technophobic crap. If it cuts down on the chances of fraud and the extra step of disputing/reporting transactions, what's a few more seconds in the checkout line?

The frustrating thing is that places like Target and Home Depot really should have been the first to embrace Apple Pay after the PR nightmare of their data breaches. Instead, they took their time even implanting EMV chip support. Home Depot had NFC payments working, but turned it off because there were some issues with their setup and some MasterCard users with Apple Pay (and they had a deal in place with PayPal). Target seems to be dragging their feet because they'd rather customers use their Red Card, although Kohl's has brought their store card to Apple Pay.

I use Apple Pay anywhere I can, and there are a lot of in-app purchases. I try not to draw attention for the in-store ones, but do hope that use at least helps NFC payments gain some traction. "Arming" my iPhone or Apple Watch just before I need to pay helps speed things up and it actually seems faster than an EMV chip read in a lot of cases.

 

[caesarp]

Tomorrow, if FedEx keeps its promise (and it usually does) I will have my first smartphone: the new iPhone SE. As I think about what this new toy will be useful for, I wonder about Apple Pay. Good idea or bad idea? I'd love to get people's thoughts and opinions. Is it really more convenient than pulling my credit card out of my shirt pocket? Is it really safer than my credit card? (My bank protects me against fraud on the card, no deductible.) How well does it really work? The fingerprint ID in my iPad Pro is so wonky that I've quit using it since it generally takes 3 or 4 tries to get it to recognize my finger, and about one time out of 4 it makes me use my passcode anyway. If I have to try 3 or 4 times to get the button to recognize my finger when I try to use Apple Pay, and one out of four I end up having to get out my credit car anyway, it will be easier just to use the card in the first place.

What are people's experiences with Apple Pay. Do you like it? Have you tried it and given up on it?

Any and all comments, opinions, and experiences eagerly appreciated.

If you pay with credit cards, you have an iPhone 6 or above, you use apple pay if possible -- why wouldn't you? If your fingerprint doesn't work, enter your code. Bang -- payment done. There is nothing to question really. If you have fingerprint issues in general, you need to re-do the process to recognize your print. But Apple Pay is a no-brainer -- of course you use it and of course its better than handing over plastic to a stranger or pulling out your card for everyone behind you to see. Now that I have a remote control, I don't get up to change the channel on my TV either. You have Apple Pay, you use it. End of story.

 

[scott523]

Here's something interesting I learned recently about Apple Pay (with Chase): You can still use Apple Pay while you wait for your physical card to be replaced in the mail.

My credit card was compromised which was disappointing. The card was voided and replaced. As I got off the phone with Chase to replace the card, my iPhone alerted me the card on Apple Pay was unavailable, then within minutes, it was made available again with a different last 4 digits. I went out and tried making a purchase with my iPhone and it worked seamlessly.

Pretty cool that I could make purchases without having to wait several days for the card in the mail.

 

[ecschwarz]

Here's something interesting I learned recently about Apple Pay (with Chase): You can still use Apple Pay while you wait for your physical card to be replaced in the mail.

That is a feature that should work for most cards since Apple Pay cards are aliases to your account, rather than your physical card (Discover actually allows multiple physical cards and obviously multiple Apple Pay cards active at once and you can freeze/unfreeze at will). I'm sure there are some issuers where a new card number will require a delete/re-add, but for everyone else, it is a cool feature that is often overlooked.

 

[neil_cm17]

Here's something interesting I learned recently about Apple Pay (with Chase): You can still use Apple Pay while you wait for your physical card to be replaced in the mail.

My credit card was compromised which was disappointing. The card was voided and replaced. As I got off the phone with Chase to replace the card, my iPhone alerted me the card on Apple Pay was unavailable, then within minutes, it was made available again with a different last 4 digits. I went out and tried making a purchase with my iPhone and it worked seamlessly.

Pretty cool that I could make purchases without having to wait several days for the card in the mail.

When the same thing happened to me with when my UK TSB card was compromised, as soon as I reported it to the bank, the card was removed from the Wallet, but I had to wait for my replacement card to arrive and re-register it with apple pay.

 

[caligurl]

i LOVE, LOVE, LOVE it! I do use it with my watch, though. SOOOOOO easy!

 

[ra4oasis]

Apple Pay is great on phones, but even better on the Watch. Seamless.

 

[Black Magic]

In the beginning, I heard that there were issues with Apple Pay that led to some transactions occurring twice for some customers. Is this an issue anyone of you have currently experienced?