Apple's (NASDAQ:APPL) new Apple Pay is expected to give other mobile payment methods a run for their money and boost overall security of mobile payments, attracting more shoppers to the technology.
Apple Pay's TouchID is a much easier payment platform for consumers than other mobile payment technologies such as Google Wallet, analysts say. And Apple Pay has the support of major banks, retailers and wireless carriers.
Apple Pay has partnered with Visa, MasterCard, American Express, Bank of America, Capital One, JPMorgan Chase, Citi and Wells Fargo. It also boasts major retail partners, including Starbucks, Disney, Macy's (NYSE:M), McDonald's (NYSE:MCD) and Walgreens (NYSE:WAG). In stark contrast, Google had just one card issuer partner (Citi) and one payment network partner (MasterCard) when it launched Google Wallet. It added Visa and American Express a year later.
Plus, Sprint is still the only wireless carrier that supports Google Wallet, while Apple is able to distribute its software independently of carriers. "With an industry as large as payment processing, with a plethora of tiny fees behind the scenes as payments make their way to the final destination, you need to get the big financial players on board while cutting carriers out of the loop. That's exactly what Apple has done," according to The Motley Fool.
Further raising the bar, Apple has prevented privacy and security fears through several methods. Every time a payment is made, a one-off payment number and security code–in other words, tokenization–is generated so that no card details are stored.
"These tokens can be used once, or transaction-specific, which makes them powerful security tools against hackers and criminals. This also makes life easier for merchants, reducing the security requirements around storing actual card numbers," according to The Motley Fool.
While Google Wallet supports tokenization, Google uses a cloud-based tokenization process, which increases security risks. Payment data is stored on Google's servers, as opposed to locally on the device-level.
Plus, Apple Pay features biometric security in the form of Touch ID and its 'Find My iPhone' app means that payments can be blocked on a lost device.
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