A number of features arrive with iOS 8.1 today, among them Apple Pay, Apple’s new mobile payment system that launches first with the iPhone 6 and 6 Plus (owners of other recent models can hop on if they pick up an Apple Watch next year). At participating physical stores (you can see a growing list on Apple’s site), you can now pay for purchases by tapping the top of your phone to an NFC-enabled register and verifying with Touch ID. For online stores and in-app purchases, all you need is Touch ID.
To set it up, go to the new Settings > Passbook & Apple Pay section. It walks you through adding one or more credit cards and relevant payment information, and the whole thing was pretty simple for the two cards I added.
It’s worth noting that Apple Pay is not simply a proxy for your credit card number, it’s actually a wild new token-based payment system. In short, each time you make a purchase, your iPhone, bank, and store swap a secure “token” that is only good for that one single purchase, authorized with your Touch ID fingerprint.
If a Target- or Home-Depot-style malicious attack were to happen, and malicious hackers stole these tokens, they would be worthless for other purchases. Another perk of Apple Pay: the people accepting these payments—cash register clerks, your restaurant waiter, etc.—never have to see your name or credit card number if you don’t want them to. In fact, they don’t get a chance to walk off with your information at all.
Apple Pay could be a massive step forward for security and privacy in electronic and mobile payments.