Quick, easy NFC-payment system. Anonymous, single-use token system keeps credit card data secure. Third-party apps for managing gift cards, movie tickets, boarding passes, and more.
Peer-to-peer payments only work between Apple devices. Setup more complex than for some competitors.
- Bottom Line
Apple Pay gets even more useful with the addition of the Apple Pay Cash peer-to-peer payment system, but forget sending money to iPhone-less friends.
For over a decade, millions of people have turned to Apple when they want to buy music, movies, and apps. With Apple Pay, they can now buy any product you could buy with a credit card, by simply holding an iPhone over an NFC terminal at the store. The mobile payment app now even lets you pay other people and store funds using its Apple Pay Cash feature. Available in 50 percent of US retail locations and accounting for 90 percent of all mobile contactless transactions where it's available, Apple Pay is clearly the most successful foray into the new world of cash-free, card-free shopping. But is it the easiest-to-use and most widely available option?
Setting Up Apple Pay
If you have an iPhone 6 or later, you already have Apple Pay. It's baked into iOS as part of the Wallet app. To use Apple Pay, you also need to set up a passcode, Touch ID, or FaceID (if you're on an iPhone X). Adding a new card is a snap. Just take a picture of the front of the card and enter the remaining security details. If you already have a card associated with your iTunes or iCloud account, Apple Pay can just draw from that.
Touch ID and FaceID comprise a strong first layer of security, but you can never be too safe when it comes to your money. So Apple Pay takes things one step further by obscuring your real card data with anonymized digital tokens. When you make purchases, this anonymous data is the only information retailers receive. Other services like Android Pay and Samsung Pay use a similar fake-number system, but Apple Pay's single-use tokens change with each transaction (Samsung Pay's don't). In fact, your financial service sends a Device Account Number that's stored on the device in a special chip called a Secure Element. All this makes Apple Pay the most secure payment choice, and even more secure than a plastic card.
Using Apple Pay
As mentioned, a lot of stores now support Apple Pay, including American Eagle, Gap, GameStop, Walgreens, and even White Castle. Some display it loud and proud with an Apple graphic in the front window or near the register, but often you'll just see the EMV Contactless Symbol. I bought lunch at McDonald's by simply holding my iPhone 6s above the NFC terminal and placing my thumb on the home button. When a payment goes through, you feel a satisfying haptic clunk. It's quick, simple, and painless. You don't even need to unlock the phone. The Apple Pay app lists all your transactions for later review. I also got an email from my bank making sure I was the one who set up Apple Pay with my card.
Competitor Samsung Pay has a clever strategy that makes it usable even at stores without NFC systems: Use embedded magnetic circuitry to mimic a credit or debit card. That way the app can communicate with any standard card reader. Granted, Samsung Pay only works on recent Samsung phones, and its security isn't as beefy as Apple's. Android Pay is restricted to the same limited number of NFC-equipped stores as Apple Pay.
The Apple Wallet app that incorporates Apple Pay has a few more uses. You can store information such as boarding passes, movie and game tickets, gift cards, and information about loyalty programs all in one spot. There's a link to a section of the App Store where you can browse for apps that take advantage of Apple Wallet, such as Fandango, Southwest Airlines, and Target. Some of these apps even allow for in-app purchases via Apple Pay. This kind of convenience adds to Apple Wallet's usefulness.
Apple Pay also works with Apple Watch. The wearable features NFC as well, so if your watch is paired to your phone, you can simply hold your wrist next to a payment terminal to make your purchase. The Apple Watch forces users to reenter a password if it senses it's no longer touching skin, so nearby thieves can't rip off your watch and use it for spending sprees.
Apple Pay Cash
Getting in a bit late on Venmo's action, Apple Pay Cash is the latest peer-to-peer payment system from a tech giant. Apple Pay Cash, introduced with iOS 11.2, also lets you store money in a virtual debit card, rather than just using Apple Pay as a conduit for a credit or bank card.
If you haven't already done so, you first need to download and install iOS 11.2. You can force the update by visiting Settings > General > Software Update. A slider switch in the Wallet & Apple Pay section of Settings lets you enable Apple Pay Cash. Once you slide this switch, you have to enter your Apple ID and password and accept a legal agreement stating that the services are provided through Green Dot Bank. The terms point out that Apple Pay Cash comprises two services: a virtual payment card and the funds transfer service.
Pay Cash works with every Apple phone back to the iPhone 6, and on iPads starting with the Air 2 model. The service also works with all versions of the Apple Watch. Android and other non-Apple devices are not supported.
Note that you can only send money to other iOS users who have accepted the agreement, and you both need two-factor authentication set up for your Apple ID. Two-factor authentication provides additional security, but it's stricter than the other payment services' setup requirements. Setup also requires reentering your credit card digits.
After I completed these steps, I was asked to add a debit card so that money could be transferred to my new bank account. You don't have to do this to use the service, but overall, the setup is more involved than it is with Editors' Choice Venmo, though Facebook Payments is easier than either.
As with Facebook Messenger's Payments feature, you send money via the iPhone's Messages app. The option is in the app tray at the bottom of the Messages' screen. Just tap the A icon to open it. You then see a dollar amount that you can increase or decrease, and you can switch between paying and requesting. Venmo and Google Wallet require you to open their separate apps to make payments. That's a plus for Facebook and Apple, in that you access payments from an app you're probably using regularly already.
When I tapped Pay to send $1 to a colleague and then hit the Send up arrow, I had to approve the transaction with a Touch ID finger press (of course, iPhone X users will use Face ID). For sending this dollar, I paid a 3 percent fee (the same as with Venmo and other services), but that's because the payment was via credit card. If you use a bank debit card, you can avoid that fee. The chat entry says Pending until the recipient receives the funds.
You tell Siri "Pay Tom five dollars," but that's also possible with Venmo and Square Cash. Apple Pay Cash, thankfully, doesn't by default share your every transaction with a special-purpose social network, as Venmo does. With Venmo, unless you change privacy settings, any of your contacts can see exactly who you paid in a feed of transactions. Some may like this, but it seems like an invasion of privacy to me. However, Venmo offers a couple of important advantages over Apple's system: You can scan a QR code to verify your payee, and you can attach notes along with a payment. Venmo also lets you pay amounts smaller than $1, Apple's minimum. Venmo and Google Wallet, which is available for iOS, add the ability to split payments among multiple recipients.
If you receive money from a contact, it goes into your Apple Pay Cash virtual cash card. You can use that balance either by dumping it back into a connected bank account or to pay for something else via Apple Pay or Apple Pay Cash. Square Cash can send you a physical cash card that you can use in stores to spend the money received in your Square account.
Apple Pay Cash, Venmo, and PayPal can all be used to shop at online retailers. PayPal (which also owns Venmo) may have the upper hand here, as the most ubiquitous internet payment service. The biggest advantage of Venmo, PayPal, and Facebook Payments, however, is that they're platform-independent—with any of them, you can send money to anyone, regardless of the operating system they use. With any of them, too, you can make and receive payments from a web browser—not so with Apple Pay Cash (or Samsung Pay). If you're using Apple's system and want to pay an Android user, you're going to have to hand over dirty old cash.
Should You Pay the Apple Way?
NFC is spreading, and if any one company can convince more stores to embrace the technology, it's Apple. But we aren't yet living in that perfect world where NFC payments work anywhere and everywhere, so you still need cash or a card sometimes. Apple Pay is a good and secure option, and the addition of Cash makes it even more useful. Apple Pay has a slight edge over Android Pay when it comes to security and extra features, and for now Android requires a separate app for peer-to-peer payments. Samsung Pay, works at more points of sale in the US, and our person-to-person payment app Editors' Choice, Venmo, works on both platforms and offers unique extras.
About the Author
Michael Muchmore is PC Magazine?s lead analyst for software and Web applications. A native New Yorker, he has at various times headed up PC Magazine?s coverage of Web development, enterprise software, and display technologies. Michael cowrote one of the first overviews of Web Services for a general audience. Before that he worked on PC Magazine?s S… See Full Bio
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