Apple Pay will launch today as part of the iOS 8.1 software update Tim Cook announced on Thursday during the iPad event. As far as the first available (Apple) numbers show, the mobile wallet system can be used at more than 220,000 stores, or inside apps simply using your fingerprint to make a purchase.
While Apple’s partner list is long and includes major players such as McDonalds, Whole Foods, and Walgreen, it lacks retailers such as Wal-Mart Stores. The good news is that it also has the three major credit card networks on board: Visa, MasterCard, and American Express.
There are limitations, though: it is being launched only in the US and lacks support for corporate credit cards or prepaid cards, and retailers’ proprietary credit cards, so it isn’t perfect yet.
As Apple’s senior vice president of Internet software and services, Eddy Cue, tells the Wall Street Journal:
“We’re trying to do something that I think is a game changer and it requires a lot of people to play together,” said Eddy Cue , Apple’s senior vice president in charge of Internet software and services, in an interview. “There’s a lot to do here and we have a lot of work to do, but it should be huge.”
Apple is known for its focus on security. Its mobile payment system encrypts each transaction with a unique code that can be used only once, eliminating the chance of a personal information leak as happened with the Target and Home Depot data breaches.
Mobile wallets have been around since 2011, but for various reasons, such as security, have failed to go mainstream. The whole industry is watching Apple now: Will it be able to turn the situation around and drive the adoption of mobile wallets?
Eddy Cue is positive, but he admits that it will take some time:
Mr. Cue said he expects the biggest share of early Apple Pay transactions to be in-app purchases. Until now, spending money on an app required a time-consuming process of creating an account and registering a credit card, but Apple Pay aims to simplify the process with the equivalent of Amazon.com Inc.’s “one-step checkout” that can be verified by a fingerprint.
Apple Pay is expected to generate revenue of $118 million in 2015 and $310 million in 2016, and is projected to boost demand for Apple devices, according to Piper Jaffray’s Gene Munster.