7 Things to Expect from Apple Pay's Launch

Published October 17, 2014 12:09 PM

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Updated October 20, 2016 10:03 AM

1 Min Read

Tim Cook, chief executive officer of Apple Inc., walks through the Apple Inc. store during the sales launch for the iPhone 6 and iPhone 6 Plus in Palo Alto, California, U.S., on Friday, Sept. 19, 2014. Apple Inc.'s stores attracted long lines of shoppers for the debut of the latest iPhones, indicating healthy demand for the bigger-screen smartphones. The larger iPhone 6 Plus is already selling out at some stores across the U.S. Photographer: David Paul Morris/Bloomberg *** Local Caption *** Tim Cook

David Paul Morris/Bloomberg

As Apple Pay launches Oct. 20, the new mobile wallet will be put to the test. It has the prestige of Apple and the participation of hundreds of card issuers, but it also faces several challenges that may be difficult to overcome. Pictured: Apple CEO Tim Cook (Image: Bloomberg News)

Employees hold packaged iPhones during the sales launch of the iPhone 6 and iPhone 6 Plus smartphones at the Apple Inc. store in Berlin, Germany, on Friday, Sept. 19, 2014. The devices generate more than half of Apple's annual $171 billion in revenue and precede a swath of other products, including new iPads and Apple Watch. Photographer: Krisztian Bocsi/Bloomberg

Krisztian Bocsi/Bloomberg

Big Customer Base

Apple may not have to worry about a lack of consumers with Apple Pay-compatible phones. Apple has sold 21 million of its new iPhone 6 and iPhone 6 Plus devices. These are the first iPhones equipped with Near Field Communication chips, which are used to make contactless Apple Pay payments at the point of sale. (Image: Bloomberg News)

The American Express Co. logo, along with those of Visa Inc. and Mastercard Inc., are displayed in a shop window in New York, U.S., on Monday, April 15, 2013. American Express Co., the biggest U.S. credit-card issuer by purchases, named Edward P. Gilligan to become its president, effective immediately. Photographer: Scott Eells/Bloomberg

Scott Eells/Bloomberg

Limited Payment Options

Discover and PayPal are conspicuously absent from Apple Pay's short list of supported funding options. Discover is working to sign on, but PayPal has said its participation "remains to be seen." Visa, MasterCard and American Express are on board with Apple Pay at its launch. (Image: Bloomberg News)

First Come, First Served

According to Apple, "the first card you add automatically becomes your default payment card," so the issuers that are first to support Apple Pay will have an advantage. Apple expects over 500 banks to support Apple Pay by early next year. (Image: Shutterstock)

An employee hands a drive-thru customer his order at a McDonald's Corp. restaurant in Oak Brook, Illinois, U.S., on Friday, July 12, 2013. Don Thompson, president and chief executive officer of McDonald's Corp., said that the company is an "above minimum-wage employer" and will continue to provide entry-level jobs, during an interview today. Photographer: Tim Boyle/Bloomberg

Tim Boyle/Bloomberg

Mixed Prep by Retailers

Apple and partners such as McDonald's are training their store employees to accept Apple Pay payments and troubleshoot issues. But some companies are not doing any special training. For example, Starbucks which earlier had training-related issues with Square Wallet is not doing any training to prep for Apple Pay. (Image: Bloomberg News)

A customer sets up his thumb print security lock on an Apple Inc. iPhone 5s at a Reliance Digital store, a subsidiary of Reliance Industries Ltd., in New Delhi, India, on Saturday, Nov. 2, 2013. Reliance Communications Ltd. is the first Indian carrier to sell Apples iPhone with a service contract. Reliance will offer customers the iPhone 5S and 5C a two-year contract with bundled data services. Photographer: Prashanth Vishwanathan/Bloomberg

Prashanth Vishwanathan/Bloomberg

Biometrics' Big Day

Apple is making a gamble in its use of TouchID fingerprint authentication for Apple Pay. Earlier efforts to involve biometrics, such as Pay By Touch, required special hardware at the point of sale and fared poorly. But, given the recent string of big retailer breaches, consumers may be willing to try something new to protect their payment card data. (Image: Bloomberg News)

A Best Buy Co. store stands in San Francisco, California, U.S., on Monday, May 19, 2014. Best Buy Co. is expected to release earnings figures on May 22. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Picky About Partnerships

Even if consumers like Apple Pay, they will have to leave their phones in their pockets at some merchants. Notably, Walmart and Best Buy two of the companies involved in the Merchant Customer Exchange mobile wallet initiative have said they won't support Apple Pay. (Image: Bloomberg News)

Customers compare an Apple Inc. iPhone 6, left, and iPhone 6 plus during the sales launch at an Apple store in Palo Alto, California, U.S., on Friday, Sept. 19, 2014. Apple Inc.'s stores attracted long lines of shoppers for the debut of the latest iPhones, indicating healthy demand for the bigger-screen smartphones. The larger iPhone 6 Plus is already selling out at some stores across the U.S. Photographer: David Paul Morris/Bloomberg

David Paul Morris/Bloomberg

Order Ahead

Companies like NCR are incorporating Apple Pay into their own services. NCR Silver merchants can enable Apple Pay users to place orders from their phones and pay remotely before visiting the merchant's location. (Image: Bloomberg News)