How Apple Pay works and how to use it on your iPhone 6 or Apple Watch

David Court September 15, 2014

Image 1 of 3

One of the major new features of the Apple iPhone 6, iPhone 6 Plus and the Apple Watch is the ability to use the devices for contactless payment, using a service called Apple Pay.

How Apple Pay works

In its simplest form Apple Pay works by combining different physical and software elements to keep transactions secure: the Passbook app to store sensitive information, the NFC radio, Touch ID (effectively your fingerprint scan) and a Secure Element chip. All you need to do is store your card details on your Apple device.

To store a debit/credit card on Passbook, first take a photo of it using the iSight camera – numbers side up – and Apple will then verify the card and store its details on the Secure Element chip. Alternatively, you can enter the numbers the old-fashioned way.

Note that Secure Element is a dedicated chip within the iPhone 6 that can’t be tampered with – its sole use is for secure mobile payments.

Once you’ve taken a picture of your debit/credit card details in Passbook, Apple will perform an online check to verify that the card belongs to you. It does this in the same way it verifies your card details if you were to make an iTunes purchase. These details are then stored on your iPhone 6, 6 Plus and Apple Watch’s Secure Element.

From here, Apple mirrors the chip and PIN payment model every time you want to make a transaction with your iPhone 6 or Apple Watch; this is essentially a two-step verification process that requires physical proof (chip/card) combined with personal verification (your PIN).

In the case of the iPhone 6 and Apple Watch, the physical proof is the NFC chip + Passbook + Secure element data + personal Touch ID (fingerprint) verification.

Once these requirements are met, the iPhone 6 and Apple Watch release a one-use, encrypted security code that’s transmitted via its NFC chip. Stores that support Apple Pay will then process the encrypted security code and debit your account accordingly.

Apple claims this process is so safe that if you lose your iPhone, you don’t need to cancel your credit cards since Secure Element can’t be tampered with, while all Passbook information can be immediately whipped from the phone using the iCloud and Find My iPhone feature.