Quite recently, Apple announced arguably the most important feature of the iPhone 6 being released this October: Apple Pay. Seeking to revolutionize payment methods, iPhone 6 users will be able to access and use cards from any participating finance company (thus far being AMEX, Master Card, and Visa) by taking a picture of their cards and storing the information extracted in passbook. This product relies on what is called near-field communication (NFC ) which is a short range connection made using radio waves, able to work at a distance of 10 cm. As of Sunday a very large group of companies have revealed that they will be carriers of apple pay and the idea is highly supported by financial institutions. [1]
That being said, Apple can't do anything with 100% approval from its consumer audience. Security became the first concern on everyone's minds when they found out about the new apple pay system, myself included. The process of taking a picture of your card and being able to use it at majority of major retail stores without needing to physically carry it around sounds convenient and is most definitely a big selling point for apple after the flop of the 5c and 5s iPhones. (Its reception also says something about society in general. Finding carrying a very small plastic card inconvenient and "needing an app for that" connotates some serious laziness, but that is a story for another day. )
Seeing as how identity theft is such a big issue with physical credit cards and the community is still hesitant about anything having to do with shared networks due to the iCloud situation, Apple makes it a point to address security concerns head on with fingerprint reading technology. In order to use the cards stored in Passbook, customers need to hold their phones up to a NFC scanning terminal, lay their finger across the home button which has stored information about what the owners fingerprint is, and authenticate the transaction.
Banks have been backing apple left and right considering the transaction process happens strictly between the user and the bank. Apple receives 0.15% of all money spent through apple pay, costing banks a large sum of money and costing corporations even more money due to the installation and maintenance of the NFC machines. Chains Walmart and Bestbuy have used the costs as their reason for not implementing the new system. Other consumers not in support fear for the opening of privacy and security breach opportunities that could be created through common use of apple pay. The system of tokenization makes it so that when a person adds a credit card to their passbook, the actual credit card number is not stored on the phone or anywhere on the network, rather an account is created to identify the user which is unique to their device. The token is stored in an encrypted chip inside the phone that Apple calls a "secure element" [2] the key point being that none of this information is being stored on Apple servers which have more recently proved to be quite susceptible to privacy issues.
Apple's creation of Apple pay is a vehement attempt at revolutionizing mobile payment methods with regard to consumer privacy and financial safety, but that does not necessarily mean it will end the struggles of security and theft. The Apple watch is able to handle this new platform, but it does not come equipped with the fingerprint scanner therefore can handle transactions without that authorization. Also, upon the release of Apple's 5s, hackers had already found ways to breach the security of the fingerprint scanner, showing serious threat to the supposed "private and easy" mobile payments. If the security of this platform proves to be riddled with holes as some of the community predicts (We cannot know for sure considering all the public has been given is a demo and brief description of the process), then physical theft will become a widespread issue, one that is not even under Apple's control.
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