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How Apple Pay works and why it matters for developers

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Re: How Apple Pay works and why it matters for developers

#91

Post by eddieroger »

21echoes wrote: post #26

> Apple Pay marks the first time a popular operating system is making payments a platform service for real-world, non-digital-good transactions, in a broad, inclusive manner that is compatible with the mainstream payments processing industry I'm sorry... what? How is this different from Google making Google Wallet back in 2011? They both use the same tech (PayPass, an industry standard), and both are made by an OS co…

> I'm sorry... what? How is this different from Google making Google Wallet back in 2011?

Google only partnered with MasterCard, and only released in a limited number of handsets (they were all Nexus if I remember correctly). Apple partnered with Visa, MasterCard and AmEx ahead of time, as well as a dozen or so merchants, so that anyone who gets an iPhone 6 can actually use ApplePay nearly immediately without jumping through hoops or hoping they have the right handset. At least that's what I read as "broad, inclusive."

For what it's worth, I tried using GWallet when it came to my Nexus S years ago, and got the strangest look from the guy at the convenience store when I held my phone to the reader and the register marked the transaction as complete. Just because Google was first by no means did it right or best, as evidenced through us not all walking around with Androids paying for things.

Re: How Apple Pay works and why it matters for developers

#92

Post by snlacks »

danpalmer wrote: post #85
cdnsteve wrote: post #32

Maybe it's just me but I'm not drinking the kool aid about Apple Pay in today's announcement. Aside, I really hated the fact that to watch the event you had to use a Safari browser, same with watching Swift tutorial videos on their website, using latest Chrome on a Mac... Maybe I'm old school but I'm actually finding that payment options are getting worse, not better. This is another example of further fragmentation.…

Just a note on the fact you had to use Safari to watch the video, there's a technical reason behind that, it's not arbitrary lock-in on Apple's part. Apple use HTTP Live Streaming for their live streams. This is an open technology they are trying to get adopted more widely (RFC: http://tools.ietf.org/html/draft-pantos-http-live-streaming-... ). Currently, HLS is not implemented by Chrome or other browsers, in part be…

Oh, so it's not a ploy to force safari use... it's a ploy to force HLS. Thanks for the heads up.

Edit: Just to be clear, it is really interesting and appreciate your comment, but it's still silly for Apple to limit their advertisements to Apple users.

Re: How Apple Pay works and why it matters for developers

#93

Post by XorNot »

aianus wrote: post #62
XorNot wrote: post #21

Earlier quoted context omitted.

Ok now I'm not sure which aspect you're talking about. Because in the physical world the friction is not "oh I need a card" it's physically getting the customer in the door. Otherwise, what's involved is needing merchants to have NFC readers. This might be an exciting new thing in the US, but certainly in my neck of the woods NFC has near universal penetration. In the virtual world...this problem has been solved over…

> Everyone has Paypal - very few people (relatively) will have ApplePay. Today Paypal has something like 150 million users worldwide while there are 72 million iPhone users in the United States alone. Presumably all of these people will eventually upgrade to an iPhone supporting ApplePay.

That is a big assumption. Phones have been getting a longer and longer tail.

Moreover, there's almost certainly >50% overlap between iPhone user/Paypal user/other service user.

Re: How Apple Pay works and why it matters for developers

#94

Post by surreal »

Schweigi wrote: post #4

Apple Pay uses industry-standard EMV contactless protocols over NFC (and MSD contactless for backward compatibility). This makes it compatible with a wide range of contactless payment terminals in deployment today. So if the last section of the article is correct that means ApplePay will be compatible with Mastercard PayPass terminals? If this is true it would be really easy to roll out ApplePay as for example in Swi…

In theory (at least that part of) the process should work internationally. It is worth noting though that Google Wallet, which has worked with MasterCard PayPass terminals since 2011, is still only available for US devices with US SIM cards.

Re: How Apple Pay works and why it matters for developers

#95

Post by tim333 »

cdnsteve wrote: post #32

Maybe it's just me but I'm not drinking the kool aid about Apple Pay in today's announcement. Aside, I really hated the fact that to watch the event you had to use a Safari browser, same with watching Swift tutorial videos on their website, using latest Chrome on a Mac... Maybe I'm old school but I'm actually finding that payment options are getting worse, not better. This is another example of further fragmentation.…

I'm presuming cdnsteve is in the US? In the UK payment options have improved in various ways. I used to be a fan of cash as the quickest and easiest way to pay for something small like a coffee but we now have NFC where you just hold your card near and it takes like 10 seconds (mostly for the waitress to press buttons), quicker than getting change for cash. Also instant free bank transfers, chip and pin and other conveniences.

Re the iphone I think it'll use the same NFC terminal I just paid for my coffee with at Pret. Being able to wave a phone rather than my bank card is a bit ho hum. I guess for sums over £20 I could use my finger print rather than having to enter the pin as one does at the moment. The advantage seems a bit marginal.

Re: How Apple Pay works and why it matters for developers

#97

Post by exelius »

DrewAllyn wrote: post #44
cdnsteve wrote: post #32

Maybe it's just me but I'm not drinking the kool aid about Apple Pay in today's announcement. Aside, I really hated the fact that to watch the event you had to use a Safari browser, same with watching Swift tutorial videos on their website, using latest Chrome on a Mac... Maybe I'm old school but I'm actually finding that payment options are getting worse, not better. This is another example of further fragmentation.…

I'm a Canadian who is temporarily in the US, and it seems so backwards to me. A signature? You mean writing on a piece of paper that probably never gets looks at allows someone to take money out of my bank account? Chip+Pin at least has a semblance of technical security. And cash? Don't get me started. Cash can be physically lost. Cash can be stolen. When you pay with cash, you get given coins as well as the thing yo…

The signature is for identification after the fact. So if someone steals your card, the credit card company can look at the signature for that transaction versus 10 other signatures for valid transactions and quickly know if it was your signature or not.

That said, I don't think we will ever live in a cash-less world. There are too many merchants for whom any technology is too much. Also, a lot of merchants don't want to pay credit card processing fees (which I expect don't go away with this system) and still others like to cheat on their taxes and running a cash business makes that easier.

Re: How Apple Pay works and why it matters for developers

#98

Post by exelius »

I'm curious how much, if anything, Apple makes off of this. It's pretty clear they're not displacing anyone in the existing merchant payment value chain (which is the mistake most other companies have made) but it's not clear how Apple makes any money off of this.

I have a hunch that Apple might not be making any money at all off of Apple Pay. Apple operates their business very differently than many tech companies. The vast majority of Apple's profit comes from the ridiculously high margins on their hardware. They develop services to increase the capability of the hardware platform; and any money resulting from the operation of those services is secondary.

When Apple initially released the iTunes store, they operated it at a loss. The entire iTunes store and all the payment systems, etc. that go along with it were built in order to sell iPods.

There's a very real possibility that Apple looked at the mobile payment market and said "Shit, there are way too many entrenched interests for us to insert ourselves in the value chain and take a cut. But having a superior mobile payment system will help us sell more iPhones, so we'll do it anyway." Those entrenched interests are what have kept every other mobile payment company from making a real dent in the overall payments ecosystem. Unlike with iTunes where Apple made demands about how the store had to function, they placated the industry while coming up with a solution that worked for both end users and the industry players. We'll see if it catches on, but I expect it will.

Re: How Apple Pay works and why it matters for developers

#99

Post by a_c_s »

bsaul wrote: post #68

A few counterpoints to having your phone used as a payment device : - it breaks more easily and wears out quicker than a card - you can't lend it to a friend to have him buy stuff for you ( i don't have a pass id iphone so maybe i'm wrong on this one) - it gets stolen more often because it has intrisic value ( and a big one for the iphone) - if it gets stolen, how are you going to call your bank to disable it ? Plus,…

It would be great if the HN crowd would stop critiquing things before learning how they work.

- If your iPhone gets stolen then you deactivate it via Apple's existing Find My Phone feature. Deactivating your device will block payments but you won't have to talk to your bank nor will you have to get the cards themselves replaced.

- You can use a password instead of the thumbprint to pay. So you could indeed lend your phone and password to somebody for them to buy things for you. Or you could just reimburse your friend for whatever they purchased.

- People already have a working smartphone on their person at nearly all times, I don't see how "wearing out more easily" is much of a critique. Nobody is suggesting that once somebody starts using ApplePay they destroy the corresponding physical card.

Re: How Apple Pay works and why it matters for developers

#100

Post by khc »

sytelus wrote: post #22
Schweigi wrote: post #4

Apple Pay uses industry-standard EMV contactless protocols over NFC (and MSD contactless for backward compatibility). This makes it compatible with a wide range of contactless payment terminals in deployment today. So if the last section of the article is correct that means ApplePay will be compatible with Mastercard PayPass terminals? If this is true it would be really easy to roll out ApplePay as for example in Swi…

Perhaps this is why Apple never embarrassed NFC. Doing NFC based payments requires terminal upgrades while credit card companies are already rolling out their own version of no-touch payments.

Did you mean "embraced"?
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