THE CHEAT SHEET. Goodbye, plastic

Not quite. But sooner or later, new technology and services such as the recently launched Apple Pay can make one particular plastic product disappear — credit cards.

Take Apple Pay. It is a mobile payment system that replaces the functions of credit cards. This is enabled in Apple’s latest iPhones, iPad Air 2 and iPad mini 3. Apple says the Pay is easier, faster and more secure than traditional payment systems and plastic money.

The science behind Apple Pay is fairly complex but the outcome appears simple. The whole Pay infrastructure sees a gathering of banks, credit card processors and goods sellers. When a consumer is at the billing counter, all she has to do is to take out her iDevice and point it towards a contact-less terminal and pay using its touch-id (a digital thumb impression). This works with the help of what science calls near-field communication (NFC) technology.

NFC is not exactly a new idea. Today, many phones have this feature — from Sony’s Xperia series to Google Nexus phones and high-end phones of Samsung and HTC. But what makes Apple Pay important is the weight Apple commands in the industry and how it can control both the software and the hardware, a privilege many of its competitors do not necessarily enjoy.

The Apple device doesn’t store your card number. Instead, it keeps a Device Account Number (DAN), which is unique to each device, like your humble IMEI number. Which means, if some other device tries to carry out a transaction using that DAN, it just won’t go through.

All you’ve to do is cancel just that DAN. Your card number is safe and you don’t need to contact whoever you had given your credit card number to. Also, there is a considerable amount of privacy in this. Apple doesn’t know the details of your purchase, while the seller or merchant doesn’t get to see your card number. Apple says it won’t collect any transaction information “that can be tied back to you. Payment transactions are between you, the merchant, and your bank”.

Not exactly. Google and PayPal have tried digital payments. But in most cases, such digital payments wanted consumers to set up special accounts or load the digital wallet with sufficient cash before purchase. That said, companies, including Google and Apple, have been investing heavily in the research and development of digital payments. For instance, in fiscal 2014, Apple’s total R&D bill stood at a staggering $6 billion, a decent slice of which went into developing digital payments systems.

Maybe. Given its clout, Apple can get retailers on board. The company says more than one million people activated Apple Pay within just three days of its release.

In the US itself, the only geography where Apple Pay is available now, 220,000 merchants have tied up with the payment service. Reports say it wants to take Apple Pay to other areas like transport.

Not many are happy with Apple Pay’s “too private” system. Also, Apple Pay clashes with some equally ambitious technologies mooted by a few of the biggies in business. Last week, retail giant Walmart and pharmacies such as CVS and Rite Aid pulled the plug on Apple Pay support.

Reports say they want to promote CurrentC, a similar service developed by a consortium they are part of. But Apple thinks the growing popularity of Apple Pay and the resultant loss of business would make these sulking firms get back on the bandwagon.

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