One of the major new features announced for the new Apple iPhone 6 is called Apple Pay. This system offers the tantalizing possibility that mobile phone users can leave their wallets at home and make payments from their credit card accounts using just their mobile phones.

How this will work

When the Apple Pay system goes live in late October, customers will be able to use their iPhone 6 and iPhone 6 Plus to make purchases at select retailers, using cards from eligible banks and credit unions. As of this time, participating card issuers include American Express, Bank of America, Capital One, Chase, Citi, and Wells Fargo, with others such as Barclaycard and US Bank listed as “coming soon.” Major retailers who have already signed on to accept payments with this system include McDonalds, Macy’s, Staples, and Walgreens, and the total number of stores that will accept this payment will be over 220,000. In addition, there will be numerous iPhone apps that will be enabled to use Apple Pay.

To activate this system, cardholders will have to first register their eligible cards with Apple’s Passbook app on an Apple iPhone 6 or iPhone 6 Plus, simply by taking a picture of it. The phone then uses a radio system called Near Field Communications or NFC to communicate with retailer’s compatible credit card terminals. In fact, cardholders will not even have to wake their phones, they will merely use their fingerprint to enable the TouchID system built in. Customers will also be able to specify a default credit card to use.

In addition, the forthcoming Apple Watch will be enabled to transmit payment information using its own NFC system. In this case, customers will simply tap the button next to the digital crown in order to initiate payment. With both the iPhone and the Apple watch, customers receive a confirmation of payment in the form of slight vibration.


While the days of the physical credit card appear to be numbered, the future of credit cards as a financial instrument are now brighter than ever. There have been other attempts to move to contactless transactions, such as Google Wallet, but its acceptance never reached a tipping point. Now that Apple and its tens of millions of iPhone users will have access to this implementation of NFC technology, we are likely one step closer to the day when we will routine leave our credit cards at home.

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