Last editedMar 20222 min read
Recent technological developments in payment systems have seen lots of new and alternative ways to process transactions other than with traditional credit or debit cards. One of these ways is Apple Pay, an iPhone-exclusive payment system that works like the contactless payment you can make with chipped bank cards.
Instead of using your bank card, you use your phone to make the payment by holding it near the payment terminal. As a fairly new technology, there is some understandable confusion as to how it works and how secure it is. To help, we explain how Apple Pay works and its pros and cons for business.
How does Apple Pay work?
Apple Pay users register their credit or debit card and fingerprint to their phones – this must be an iPhone 6 or above. Entering the information is easy as you can simply take a photo of your bank card to upload to the Passbook app, as well as enter the details manually.
Once the card is registered, the phone can be used to make purchases similarly to how you make a contactless payment with a chipped bank card. You hold the device close to the contactless payment reader while pressing your finger on the home button of the app, which then reads your fingerprint to ensure it is the registered user making the payment. Alternatively, you can set up a facial recognition authorisation instead of the fingerprint.
Is Apple Pay safe for business?
Apple is fully aware of how important it is for its mobile payment channel to be perceived as secure. It has invested a lot in the security aspects of Apple Pay, and the result is a mobile payment system that is incredibly secure. Nothing is infallible in this day and age, but Apple’s six-digit passcodes and Near Field Communication (NFC) technology using built-in and device-unique Secure Element chips get it about as close as can be.
Apple also never shares card details when a transaction is performed through Apple Pay, so every payment remains private and secure. Bank-card numbers are not stored in the devices used for payment, nor are they kept on Apple’s servers. In fact, Apple itself does not keep any transaction information at all, although each user can view their recent purchases via the Wallet app.
Advantages of Apple pay for business
The pros of Apple Pay for business include:
quick and easy payments
secure credit card data
high-reward credit card option
The NFC-based payment system makes it easy for customers to make payments with their phones. It means no more digging around in pockets and purses for cash, or inserting a bank card and entering the passcode before waiting for the terminal to process the data. Security is also very good, with an anonymous, single-use token system keeping all the data safe. Apple Pay also offers its own high-reward credit card to complement the payment system.
Apple Pay limitations
The are some Apple Pay limitations that businesses need to be aware of:
only works with iPhone 6 and above
facial recognition not always reliable
potentially complex set-up
Any iPhones older than the iPhone 6 will not be compatible with Apple Pay. This is currently an issue because many people hold onto their older phones instead of upgrading every time a newer model is released. However, it will eventually become less and less of an issue as more people upgrade over time. Some stores have reported issues with the facial recognition feature, while some stores find it complex to set up.
We can help
If you’re interested in finding out more about the advantages and disadvantages of Apple Pay for business, or any other aspect of your business finances, then get in touch with our financial experts at GoCardless. Find out how GoCardless can help you with ad hoc payments or recurring payments.