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This is an update to Apple Pay. In March 2018 Apple released some commercials that explain Apple Pay in simple steps, which you can review by clicking here.  

In February 2018 appleinsider reports,”Apple adds 22 more banks to list of institutions supporting Apple Pay,” “Apple Pay picks up 26 more US banks & credit unions” and “Clearhaus support brings Apple Pay to over 5,000 more European online stores.” appleinsider reports, “Estimates from Loup Ventures suggest there to have been 127 million global Apple Pay users by the end of 2017, up from the estimated 62 million users at the end of 2016. Based on a claimed 795 million active iPhones worldwide, the 2017 Apple Pay users represent 16 percent of the global iPhone user base.”

If you haven’t added Apple Pay to your iPhone you should consider below why you should, since it is actually safer than using your credit cards. If you have an iPhone X watch how simple it is to use Apple Pay. 

Have you used Apple Pay with your iPhone 8 or X (also works with SE, 6/6S, 6/6S Plus, iPhone SE, 7 or 7 Plus [see the complete list of compatible iOS devices])? You may want to seriously consider adding it now that it has proven to be more secure than the new chip card issued by banks. A survey in 2016 said only 1 in 5 iPhone users have tried Apple Pay. The Wall Street Journal says in 2016, “Just 13% of iPhone users have tried the mobile-payment service, by one estimate. PYMNTS reports that in September 2017 now 24% iPhone users use it.  Apple Pay Vice President Jennifer Bailey, says that Apple Pay is accepted in half of the stores in the United States.

An article in AARP notes that “Those new security chips in your credit cards aren’t helping much in cutting down on credit card fraud, partly because thieves found other ways to steal and partly because not enough merchants are using the chips, says a new report issued this week.”

The Apple Pay is superior to the chip card because Apple Pay uses a device-specific number and unique transaction code. So your card number is never stored on your device or on Apple servers, and when you pay, your card numbers are never shared by Apple with merchants. When you hand over your chip card to a merchant your credit card number, name and security code on the back of the card are exposed to whoever handles your card.

How Mobile Payment Systems Work
Bluefin explains in three steps:

First, mobile wallets utilize NFC, which means the presence of a physical card isn’t necessary, and you don’t have to worry about someone running off with your card or wallet. And, if someone steals your phone, both main smartphone providers (Android and Apple) offer ways to lock and erase data from your phone remotely.

Second, Apple, Android and Samsung mobile wallets utilize a form of tokenization to protect data during a transaction. When you enter your card details, they are encrypted and sent to Apple, Android or Samsung servers. Then, the information is decrypted, the card’s payment network is identified, and the information is re-encrypted with a key only the card’s payment network can use.

Third, the network then creates a Device Account Number for your phone that is encrypted and sent back to the phone manufacturer. The Device Account Number can’t be decrypted or stored with the device manufacturer, and it is kept separate from the phone’s operating system and isn’t backed up in the cloud.

Dynamically Generated 16-digit Token
Apple pay uses a dynamically generated 16-digit token, which is at the heart of its security, which rippleshot says is “ensuring that merchants never directly receive or have the ability to store customers’ actual credit card numbers – which would go a long way toward preventing the large payment card breaches that have dotted the landscape for the last several years.”

How difficult is it to hack Apple Pay?
Quora answers this question by saying, “It’s literally impossible.” Apple is so serious about its security that c/net reports Apple is willing to “pay up to $200,000 — to researchers who find and report vulnerabilities in specific Apple software.” You can be sure that Apple Pay is at the top of the list.

Who Says Apple Pay Beats the Chip Card?
Jason Snell, former editorial director of Macworld, and has reviewed every major Apple product of the last few years, says, “I bought all the purchases at both stores by tapping twice on my Apple Watch and using Apple Pay. This has lost none of its novelty for me over the last year–it’s still incredibly cool to pay without pulling either my wallet or phone out of my pocket….Though our cards now have chips, which allows them to be inserted into the chip readers common elsewhere in the world, most card issuers still demand that we sign a printed receipt when we pay, rather than inputting a PIN code. This will sometimes lead to a heavy sigh from a cashier as they realize they need to go find a pen so you can sign. I bypassed the issue entirely by using Apple Pay.”

Processing Time
Brian X Chen, New York Times, has an article explaining why Apple Pay and mobile wallet payment services beat the chip card in processing time. “At Walgreens, after I inserted a chip card, the transaction took eight seconds before a receipt started printing; Apple Pay and Samsung Pay took three seconds; and Android Pay (Google’s service) took seven seconds. At BevMo, the chip payment took 10 seconds; Samsung Pay took four seconds and Android Pay and Apple Pay each took five seconds. At Nancy Boy, the chip took eight seconds, and all the mobile payment services tied at 2.4 seconds.” Cade Mitz, wired, writes, “the new chip tech is horribly slow….With Apple Pay and Android Pay, payments are much faster.”

Security
Brad Reed, BGR, says, “Apple Pay is more safe and secure than using your credit card.”

BluePay reports, “EMV cards can use tokenization, but this extra security feature isn’t necessarily standard. This is an important distinction — especially for e-commerce merchants. In the online world, “EMV’s security technology becomes obsolete. With online shopping carts, there’s no way for customers to use the embedded chip. And thus, chip & PIN cards are about as secure as normal swipe & sign plastic. Apple Pay’s tokenization works for all retail environments — online and offline.”

The US Government has endorsed Apple Pay.

Users of Apple Pay
Apple hasn’t released figures on how many are using Apple Pay so we have some reports that may indicate some possibilities. Pymnts reports that 1 in 20 iPhone users actually use Apple Pay which is around 3 million.  These 3 million users obviously prefer Apple Pay over the chip card when they can pay for an item using this method, otherwise there would be no users to report if they were not happy with Apple Pay. The Wall Street Journal  says that 13% of the 680 million iPhone users which means around 88 million have tried Apple Pay. However, Apple Pay requires a 6/6S, 6/6S Plus, iPhone SE, 7, 7 Plus, 8 or iPhone X, so millions of older iPhone user are not able to use Apple Pay. As these older iPhones are replaced with new models, you can expect even more will try Apple Pay in the future.

“Overall, satisfaction with mobile payments is quite high at 80%, despite complaints about low merchant penetration and inconsistent customer experience at point of sale. Mobile payment has yet to reach the tipping point that will take it from novelty to norm.”  NFC World

How Does Apple Pay Work?
Just watch this video by Apple on how easy it is to setup and use:

Banks & Credit Unions
“Apple on Tuesday added over 25 more banks and credit unions to its list supporting Apple Pay, spread around both the U.S. and China.” appleinsider How many banks and credit unions use Apple Pay? Hundreds. For a complete list go to Apple’s page on the complete list.

Apple Pay Superior With Merchant Hacks
If the merchant you purchase with using Apple Pay is hacked for a list of credit card numbers, expiration date and verification codes, Apple Pay uses a one time cryptic number that does not include your credit card information so the transaction is useless to the hacker. If you use your chip card you do not have this protection.