Unless you've been living under a rock, you know by now that Apple launched a bevy of new products and services yesterday in a star-studded (can you say Bono?) event in Cupertino, Calif.
Of all the the major announcements — the launch of the iPhone 6, the iPhone 6 Plus, the Apple Watch and Apple Pay — the latter is arguably the most important news for retailers.
Apple Pay, a mobile payment service for online and store-based retailers, is Apple's own version of a mobile wallet. Launching this October, Apple Pay will be embedded into the iPhone 6 and iPhone 6 Plus (which will become available on Sept. 17) and in the Apple Watch (available early next year).
According to an article in New York Magazine published yesterday, the technology works as follows: To make a purchase, users tap their iPhone (or Apple Watch) against a touchless payment terminal while holding their thumbs over the Touch ID sensor, and a near-field communication (NFC) chip communicates with the terminal using a one-time security code generated for the specific transaction.
Many large retail chains already have NFC-enabled POS terminals, so Apple's system will work at places like McDonald's, Target and Whole Foods without requiring those stores to install new hardware at each cash register. Payment information will be stored on a chip Apple is calling the Secure Element, and won't be visible to the merchant. Online retailers will also be able to use Apple Pay to facilitate credit card transactions within their iOS apps.
Mobile payment experts weighed in on the news yesterday.
Dov Cohn, general manager of mobile solutions for email marketing firm Bronto, said Apple Pay will become as prolific as PayPal, and just as addictive.
"Apple Pay has the opportunity to become the one-click payment method of mobile commerce. Look out Amazon," Cohn said. "[The] Apple announcement is the kick in the pants that mobile commerce needed. Apple Pay, integrated into the iPhone and available to any mobile app, directly answers two of the key shopping concerns of digital consumers — ease of use and security — and should get consumers to open their mobile wallet."