A guide to Apple Pay, the cardless payment tool for iOS users

GUIDE: Program Guide
DIFFICULTY: Intermediate
TIME TO READ: 6 minutes
POSTED: August 6, 2018
UPDATED: September 19, 2018
LOYALTY PROGRAMS: Relevant to Multiple Programs

Apple Pay – and its competitors on Android – are helpful for people in the frequent flyer points game, with easier payments (as long as you have your device) and you’ll still earn rewards just as you would if you used the physical credit or debit card.

You also benefit from increased security and convenience, and can ‘carry’ more cards with you to ensure you have the right card for the right payment in your digital wallet.

The goal of this guide is to walk you through just what Apple Pay is, who it is available to, how it affects your rewards programs, and a general look at other features of the platform, including security.

If you are an Android user, we have a separate guide for you.

Which cards can be used?

Apple Pay is currently available to customers of:

How does Apple Pay actually work?

Apple Pay is a method of payment whereby you link your credit card to the Wallet app in your Apple device and use the phone to purchase items. This avoids you having to open your wallet, or worse still, remember which card is in which wallet or purse.

It can be used anywhere you see the contactless or Apple Pay symbols:

Contactless Apple Pay symbols

Here are some of the key retailers displaying the Apple Pay logo:

Apple Pay retailers

As someone who has multiple cards in Apple Pay, you might find it incredibly convenient.

For example, American Express allow you to hold two American Express credit cards plus a charge card. Factor in a points-earning Visa such as ANZ Frequent Flyer Black or HSBC Qantas Platinum, and say you also happen to carry a business card then you’ll have a mix of points-earning cards to choose from, some of which you may only use for contact-less payments infrequently.

Using a digital wallet such as Apple Pay, you now theoretically have the ability to select from multiple cards and decide which one will best suit your current purchase, depending on the points-earning potential of the transaction.

For example, you may choose to use Platinum Edge for supermarket spend and your Explorer for a solid 2 points per $ spent on everything else.

How does Apple Pay work with my rewards programs?

If you do have an eligible card, your ability to earn points through your card remains unchanged. Whether you use Apple Pay or carry out a traditional transaction with your physical card, your rate of points earning will remain exactly the same.

One future goal for Apple’s Wallet is for store loyalty programs to eventually link into Apple Pay, as has already happened with the Walgreens pharmacy chain in the US. Whilst they are not linked to frequent flyer programs, they will ensure a greater adoption of the platform across the board, and innovation overseas will be a blueprint for what comes to Australia in due course.

How do I set up and use Apple Pay?

Setting up Apple Pay on your device

Any of the newer iPhones, Apple Watches and iPads are ready to be used with Apple Pay. Check the Apple website to see if your device is included.

If you don’t have this card set up within your iTunes account, simply tap the + sign in Wallet and add your card’s details.

Using an iPhone at a point of purchase

iPhone models from the iPhone 6 up have been set up with a function called ‘Near Field Communication’ (NFC). Consumers simply need to hold their iPhone near a contactless card reader and authorise via Touch ID or Face ID.

Alternatively, you can double-click the Home button and go to the Wallet app.

Using an Apple Watch at a point of purchase

Apple Watch owners simply need to double-click the side button on their watch and hold it near the contactless card reader. A tap and beep then confirm the payment has been sent.

Using Apple Pay in Safari

If you use Safari as your web browser on your iPhone, you can expedite the purchase process with Apple Pay.

If you are browsing on your Mac or iPad and have your iPhone or Apple Watch next to you, then you can complete the process with your handheld device.

If you are lucky enough to have the MacBook Pro with Touch ID, then you can verify your identity that way.

Using Apple Pay within apps

Depending on support from the app developer, you can also use Apple Pay for in-app purchases – for example, with Deliveroo – making the payment very simple.

How secure is Apple Pay?

As soon as anyone mentions touchless technology, it’s only a matter of time before someone else sprouts the associated dangers (some perceived and some real). However, this is what sets Apple Pay apart from using a physical card.

When using a credit card, your name and credit card number are shared and used across multiple platforms. Apple Pay removes the necessity for your name or credit card details to appear anywhere.

Apple Pay creates a Unique Account Device Number (UADN) which it assigns, encrypts and securely stores in ‘secure element’, a dedicated chip in your device.

When you make a purchase, the UADN along with a transaction-specific dynamic security code, are used to process the payment, thereby bypassing the need for your name or details to be shared with anyone.

Should the unfortunate situation arise that you either lose your phone or have it stolen, you are able to use Apple’s Find My iPhone website or app, which can track, delete or suspend both payment details and all other information on your device.

You will no longer have to waste time on the phone to suspend or cancel a card that you have lost at home. You can locate it remotely, or suspend the payment feature until you have found your device. Replacement card details from some providers also automatically find their way into Apple Pay without you needing to set them up again.

Why are some big bank partners missing?

Other big banks, notably NAB, Westpac Group, Commonwealth and Bankwest are all not on Apple Pay due to commercial decisions on their end. I personally love the platform and suspect that many consumers would now factor digital payments into their banking decisions.

It’s interesting that banks are still (not) using Apple Pay as a commercial lever for their own ends. Rollout in Australia had been hindered by stalled negotiations between Apple and the big banks, due to a disagreement over payment fees.

ANZ was originally resistant to jumping onboard but joined in April 2016. CommBank and NAB, on the other hand, have opted to use their own apps (that’s also an option for ANZ customers).

Westpac customers are left using Fitbit Pay, Garmin Pay or their own Paywear device – all fairly niche products.

You can read more about those options in our guide to Android digital wallets.

Summing up

Consumers have formed strong habits around contactless options and Apple Pay achieves the aim of making transactions easier and more secure for those with access to it.

For points collectors who are heavy credit card users for their day-to-day transactions, the added security should be appealing and the ability to easily switch between different cards at the point of sale is helpful too.

Let’s hope that the other banks extend this service to their customers sooner rather than later.

Supplementary images / video courtesy Apple and American Express.

A guide to Apple Pay, the cardless payment tool for iOS users was last modified: September 19th, 2018 by Matt Moffitt