Apple revealed two iPhones, a watch, and a brand-new mobile payment platform at an occasion in Cupertino, Calif., today. The mobile payment system, called Apple Pay, has actually been rumored for many years now and intends to change the means customers pay for goods. Tim Cook, Apple’s CEO, introduced the Apple mobile payment system, stating businesses depend on a “fairly old payment procedure” in his presentation. With Apple Pay, owners of the new iPhone 6 will have the ability to utilize their phones to pay for daily purchases.

Is Apples Mobile Payment System a Game Changer or Does It Just Spell Danger?

“This entire procedure [of spending for whats now] is based upon this little piece of plastic – whether its a credit or debit card,’ stated Cook throughout his discussion. ‘We are absolutely reliant on the exposed numbers, and the outdated and susceptible magnetic interface.”

With Apple Pay, the tech giant intends to bring mobile payment into the mainstream like no other business has had the ability to.

How does the Apple mobile payment system work?

Users can include a new payment card, utilize their current card on file with their iTunes account, or scan their charge card with their brand-new phones. Once that details is submitted with Apple Pay, users should buy items at getting involved shops by putting their smartphone to a sensor. Users will also have the ability to touch their thumbs against the phone’s ID sensing unit to verify the deal. One fast beep implies a deal has actually been processed.

Apple’s mobile payment system uses cordless innovation referred to as near field communications to transmit payment details from a consumer’s mobile phone to the shop’s checkout system.

When a user buys something at a participating shop, a one-time payment code is generated. Credit card numbers will certainly not be stored on a user’s phone. Apple also says it’ll not know exactly what you are acquiring since it promises not to track deals. If an iPhone is lost or taken, a user should suspend payments from the gadget without canceling their credit card by using Find My iPhone. Visa, MasterCard, American Express, in addition to banks like Chase and Bank of America are all on board.

The technology will be built into each iPhone 6 and iPhone 6 Plus. Among the even more than 200,000 taking part suppliers is Subway, McDonald’s, Disney, and Walgreens. Online deals will certainly work in a comparable means. Uber, Groupon and Target have enabled Apple Pay to deal with their apps.

Is it safe?

Despite reassurances from Cook that Apple Pay is safe and has built-in security measures – such as Touch ID, a Secure Element chip, a vibrant security code for each transaction – current cyber attacks could leave customers in doubt.

About 3 million customers were victims of smartphone theft in 2013. Smartphones, naturally, bring vital information, such as images, contacts, email accounts, and banking apps. In the wrong hands, that kind of information can trash havoc.

It’s true that there are ways customers should secure themselves nowadays. You can protect your phone by establishing a screen lock with a 4-digit PIN, backing up data to a computer system or by means of a cloud, setting up an app to find the phone or downloading an anti-virus app. You may even use less usual methods to secure your phone, like making use of a PIN longer than 4 figures or a password, setting up software that should eliminate your smartphone’s contents, or using security functions aside from screen lock.

Despite the availability of these security measures, data breaches have only grown in breadth and scale over the previous few years. From Target to Home Depot, data breaches are not an anomaly anymore, they’ve actually become the standard. Apple itself recently made headlines for suffering a breach with its iCloud storage service where various nude celebrity photos were stolen and released online. Though the tech giant rejected that the breach was a result of a security problem on its end, the company did announce plans to boost security measures. Still, it’s a reminder of how easy customer information should be taken.

Mobile payment has not gained adequate traction over the years

The mobile payment market has actually been lingering in the background without really crossing over into the mainstream over the past couple of years. Starbucks, Google, PayPal, Square, and countless other startups have actually aimed to promote mobile payment systems. Many of these business have actually failed to acquire traction in the mobile payment market due to the fact that business acceptance was spotty and paying by phone was not as practical as it might seem. A survey conducted in 2013 by electronic transactions consultancy Consult Hyperion revealed that 64 percent of U.S. customers state they’d never make use of a mobile wallet.

“The survey shows that issuers need to do a better job of communicating what mobile wallets are and what advantages they bring,” stated Consult Hyperion Global Ambassador Dave Birch.

Of course, age makes a distinction. Half the men in between 25-34 who were surveyed said they may consider making use of a mobile wallet. Meanwhile, 78 percent of ladies between 45-54 stated they ‘d never ever utilize a mobile wallet.

Despite public unwillingness to mobile wallets and payment systems, Apple should push the pay by phone market into the mainstream like no other business. With its standing and “cool” element, Apple might be able to make major inroads with its brand-new mobile payment system. The concern is: Should the public jump on board the mobile payment train?

Caution over mobile payment

These days, you can conceivably leave your wallet in the house and utilize your smart phone to pay for every deal. Whether you are seeking a location to park you car (you could also use Uber or Lyft) as you head to work, aiming to spend for your coffee and buy a sandwich with your phone, or purchasing groceries and going to the films after dark – you might utilize your smartphone for each of those transactions.

But centering your life around your mobile gadget is a hazardous proposition. Sure, pay-by-phone might offer benefit, however with questions surrounding the security of this type of technology, it mightn’t be such a bad idea to wait and see how whats unfold. The CTIA, an association that represents the wireless market, revealed that in 2015 smartphones sold in the U.S. will consist of a capability to clean information if the phone’s owner authorizes it. This past February, Congress introduced an act requiring all smart phones to have a kill switch to erase information from another location. However neither the CTIA’s move nor the legislative bill addresses mobile issues in the short-term.

It’s a terrifying thought and feelings to think that today’s youth can mature paying for goods more with their phones than with money or a debit card. Paying for something with cold, hard cash teaches youth about the value of cash. And with a debit card, teens can discover about money management. Parents can acquire prepaid debit cards for their children and utilize them to teach lessons about excellent cash habits. While mobile payments won’t render money, debit or charge card obsolete, it could make teaching these lessons more difficult, if it ends up being really mainstream.

For now, we will need to wait and see how much of a game changer Apple Pay actually is. Customers have actually shown reluctance to utilize their phones as wallets in the past and in spite of Apple’s security reassurances, some folks may continue to be uneasy. We will see exactly what happens when Apple Pay launches in October.