Citibank, Wells Fargo sending its customers an introduction to iPhone 6, Apple Pay

Posted:
in iPhone edited September 2014
Following up on a press release issued alongside the initial introduction of Apple Pay, Citibank and Wells Fargo have both started emailing customers with a "coming soon" introduction to the new mobile payment feature associated with iPhone 6.

Citibank Apple Pay


Citibank notes that 200,000 stores "and counting" will offer "quick and easy payments" via Apple Pay using customer's existing credit or debit card accounts, with no need to apply for a special account. The bank also states that when using Apple Pay, "you still get all the great features your Citi Card provides."

Citibank says it has "200 million customer accounts" globally, although Apple Pay will initially only work on its "Citi-branded consumer credit and debit cards (except for ATM and Chairman cards) issued in the continental U.S. and Hawaii."

Apple's chief executive Tim Cook noted in his recent interview with Charlie Rose that Apple chose to work with existing banks and card processing networks because customers were generally happy with their existing accounts and wanted to retain their existing programs, including airline mileage plans and other cardholder features that banks currently offer.

Citibank was announced as an early Apple Pay partner along with other top US banks including American Express, Bank of America, Capital One, Chase and Wells Fargo, as well as credit card networks Visa and MasterCard.

Wells Fargo Apple Pay


Apple expects to activate U.S. point of sale Apple Pay transactions in October, with an additional set of banks slated to join afterward, including Barclay, Navy Federal Credit Union, PNC, USAA and US Bank.

Building on Touch ID, Passbook

The new iPhone 6 will allow users to replace the conventional practice of credit card swiping with an electronic transaction that generates a "token" for each purchase, which Citibank described as "a substitute account number rather than your real Citi Card account number."

Apple Pay's single use token expires with each use, preventing the card holder from worrying about his or her card being skimmed and cloned for unauthorized purchases, or having credit card numbers leak in a retail store exploit, resulting in an identify theft problem.

If a user's phone is stolen, the electronic Apple Pay representation of their accounts can't be activated without a Touch ID fingerprint, so there's no need to cancel one's accounts or obtain a new account number. Putting a device in "Lost Mode" will also block any attempts at Apple Pay purchases from the device.

Apple Pay users will be able to transfer their default iTunes credit card into the system just by suppling the card security code, and can input additional cards using the iPhone 6 camera.

Passbook Apple Pay


The entered cards appear in Passbook and the user can select between them before making a purchase, or simply use their default card by activating Touch ID while pointing the phone at a payment terminal.

Apple Pay partners with banks rather than rivaling them

Google pioneered NFC payments on Android three years ago, but used a different credit card model that essentially made Google a card issuer for a specific "Wallet Card" MasterCard account that needed to be credited with money (like a PayPal account), or could pass through charges to another account.

That allowed Google to collect data on users, but put it at odds with banks because Google was now a competitor. Users also needed to set up a new account, rather than using the cards they already have and use, eliminating the benefits of miles, cash back or other loyalty programs.

Despite spending lots of money deploying Google's Wallet payment terminals, Wallet never became popular because it didn't solve any real problems while injecting new problems and complications. Google's terminals will however continue to work for Apple Pay users, using their own, existing accounts.

Android's wide open access to NFC hardware, which included "Android Beam" file transfers similar to (but not compatible with) Apple's Bluetooth-based AirDrop, and the QR-code like ability to launch any arbitrary webpage URL from a static RFID tag opened up serious security problems for Android users that do not exist on iPhone 6 because Apple isn't exposing the NFC reader to tasks outside of Apple Pay.

Apple Pay has also caught the attention of PayPal, which launched an ad campaign questioning Apple's ability to secure payments. That message that was roundly criticized given PayPal's long history in poorly managed security, user-hostile policies and high transaction fees.
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Comments

  • Reply 1 of 23
    calicali Posts: 3,494member
    "Apple Pay partners with banks rather than rivaling them"

    Sometimes I wonder what would have happened if Apple did the opposite.
    anyone wanna bite?
  • Reply 2 of 23
    Quote:

    Originally Posted by AppleInsider View Post



    "...Google's terminals will however continue to work for Apple Pay users, using their own, existing accounts."

     

     

    Hah!

  • Reply 3 of 23
    cali wrote: »
    "Apple Pay partners with banks rather than rivaling them"

    Sometimes I wonder what would have happened if Apple did the opposite.
    anyone wanna bite?

    I work for a bank it is a fear if a large tech co like apple used their cash for financing and took the bank out. Like everyone else we will be using apple pay
  • Reply 4 of 23

    Yup, Wells Fargo sent me a notice that they were going to use Apple Pay a day or so after the rollout.

  • Reply 5 of 23

    BofA sending this...

     

    Followed by a ton of disclaimers and trademark text of course.

  • Reply 6 of 23
    Quote:

    Originally Posted by AppleInsider View Post



    Following up on a press release issued alongside the initial introduction of Apple Pay, Citibank has started emailing its customers with a "coming soon" introduction to the new mobile payment feature associated with iPhone 6.

    First we get SPAM’d by Apple with free music and now we get SPAM’d by one of the largest banks in the world on how to use new security features on the iPhone 6?!?!

    WTF?!?!?

    Apple must be selling our info!

    And some people talk about google...

     

    /s

  • Reply 7 of 23
    Chase has been promoting Apple Pay heavily since last tuesday as well.
  • Reply 8 of 23
    calicali Posts: 3,494member
    jdmac29 wrote: »
    I work for a bank it is a fear if a large tech co like apple used their cash for financing and took the bank out. Like everyone else we will be using apple pay

    Wow.

    This might explain the appreciation for ?Pay from banks. It's like when a king spares a criminal from being beheaded then he repeatedly kisses the kings feet in relief.

    It's good business for everyone. Apple tightens up security for card issuers in return for a small fee.
    I like all the free advertising Apple gets in return for the deed. Banks are promoting ?Pay like everyone owns an iPhone 6.

    This is beginning to look like Apples biggest innovation since the iPad.

    If I were an Android user, all these ads and emails would make me curious.
  • Reply 9 of 23
    cali wrote: »
    "Apple Pay partners with banks rather than rivaling them"

    Sometimes I wonder what would have happened if Apple did the opposite.
    anyone wanna bite?

    Remember the original Google TV and how it miserably failed? One of those reasons was trying usurp the content providers without working with them.
  • Reply 10 of 23
    Apple has found a way to get banks to promote its phone. Tim Cook said he wanted to create greater innovation through partnerships. I guess this is what it looks like. Pairing banks with Tech and a watch with a iPhone and giving Developers greater access to iOS.
  • Reply 11 of 23
    kibitzerkibitzer Posts: 1,114member
    Here's the irony: If you want to prevent any particular one of your credit or debit card accounts from being hacked, you must never buy anything with that card other than by using ?Pay!

    Handing the card to a server at a restaurant or swiping the magnetic strip through a terminal anywhere defeats the peace of mind and security offered by ?Pay. It leaves the door wide open to the traditional theft problems we have now.

    Once a particular card has been entered into ?Pay on your iPhone, lock it up and leave it at home. Don't ever use that physical card to buy anything or even carry it on your person, where a thief using an RFID scanner can skim your info.
  • Reply 12 of 23
    netroxnetrox Posts: 1,415member

    "Handing the card to a server at a restaurant or swiping the magnetic strip through a terminal anywhere defeats the peace of mind and security offered by ?Pay. It leaves the door wide open to the traditional theft problems we have now"

     

    I wondered the same thing but I think if it gets stolen, you STILL can use Apple Pay because the token will be re-issued from the bank with a new CC info. And no, the CC info won't be stored on your iPhone unless you manually store it.  

     

    But yeah, best that all credit merchants use NFC terminals. 

  • Reply 13 of 23
    cali wrote: »
    "Apple Pay partners with banks rather than rivaling them"

    Sometimes I wonder what would have happened if Apple did the opposite.
    anyone wanna bite?

    This is the main reason that Google's proposals were rejected, even though they were submitted years ahead of Apple's.

    For starters, Google wanted every transaction to be trackable by their servers (as an advertising-based business I get that they couldn't resist the massive allure of this feature request and the advertising riches it would bring).

    But the banks and clearing houses were naturally wary of the immense leverage this would give Google, leverage that coupled with piles of cash, would give Google in 10-15 years the kind of power over them that, say, Amazon is currently exercising over the book publishers, who are looking like an increasingly endangered species right now.

    Apple's proposal of an anonymous, secure empty pipe offering privacy along with ease of use for both sides of the transaction sits well with their well-known market strategy of selling hardware to consumers and enterprise, and they'd be happy to accept a nominal fee per transaction that covers their costs until such a time as their system gains global traction, at which point a fee renegotiation would be feasible.
  • Reply 14 of 23
    Quote:



    Originally Posted by cali View Post



    "Apple Pay partners with banks rather than rivaling them"



    Sometimes I wonder what would have happened if Apple did the opposite.

    anyone wanna bite?

     

    Apple can't step on, fight, and take over everyone in their way.  It makes sense for them to partner with existing banks.  Let the banks take care of handling the credit transactions and Apple can supply the technology.

  • Reply 15 of 23
    techguy911 wrote: »
    Apple can't step on, fight, and take over everyone in their way.  It makes sense for them to partner with existing banks.  Let the banks take care of handling the credit transactions and Apple can supply the technology.

    Plus Apple avoids banking regulations.
  • Reply 16 of 23

    It is a very clever implementation. Well played Mr. ?Pay, well played indeed. It appears that you know your judo very well. One really cool thing about it is that the card names (except when using the default thing) show up on the screen, so the banks get that branding presence that they love.

  • Reply 17 of 23
    Quote:

    Originally Posted by techguy911 View Post

     

     

    Apple can't step on, fight, and take over everyone in their way.  It makes sense for them to partner with existing banks.  Let the banks take care of handling the credit transactions and Apple can supply the technology.




    Correct.

     

    Moreover, the banking industry (like telecommunications) is heavily regulated. It really isn't in Apple's best interest to get mired in that sort of bureaucracy, hence the reason why Apple is not a bank nor does it operate its own mobile telephone network.

  • Reply 18 of 23
    Quote:

    Originally Posted by cali View Post



    "Apple Pay partners with banks rather than rivaling them"



    Sometimes I wonder what would have happened if Apple did the opposite.

    anyone wanna bite?



    it might be another five years before any of this could happen. there are a ton of regulations just in the US to make something like this work just working with the banks. if you are acting in place of them the ton becomes several. 

     

    Which is part of why Apple doesn't want to be a bank, an ISP, a cell service company etc. 

  • Reply 19 of 23
    Quote:

    Originally Posted by Chris_CA View Post

     

    First we get SPAM’d by Apple with free music and now we get SPAM’d by one of the largest banks in the world on how to use new security features on the iPhone 6?!?!

    WTF?!?!?

    Apple must be selling our info!

    And some people talk about google...

     

    /s


     

    Quote:

    Originally Posted by netrox View Post

     

    "Handing the card to a server at a restaurant or swiping the magnetic strip through a terminal anywhere defeats the peace of mind and security offered by ?Pay. It leaves the door wide open to the traditional theft problems we have now"

     

    I wondered the same thing but I think if it gets stolen, you STILL can use Apple Pay because the token will be re-issued from the bank with a new CC info. And no, the CC info won't be stored on your iPhone unless you manually store it.  

     

    But yeah, best that all credit merchants use NFC terminals. 


     

    As I understand it, your credit card is NEVER on file with Apple Pay. You can't manually store it to use with Apple Pay. 

     

    Apple has been appropriately silent about details for security reasons but the gist that I have gotten is something like

    1. you submit to register your card with Apple Pay

    2. Your bank requires you to follow some set of steps to prove the account is yours and issues you a device specific password not unlike the app specific ones set up by Google, Yahoo etc during two step verification. 

    3. You go to make a payment and both your phone and the terminal make requests to the bank server. The bank server verifies that your request is coming from the proper trusted device (perhaps via a second 'password' that was generated by the device during the initial setup?). If yes then it issues a transaction authorization code to the terminal to approve the code. 

    4. if your phone is stolen the server can be told not to take that device specific code anymore. by the same token, if that password is manually entered into a system to attempt a transaction and doesn't come with your trusted device's request, its not approved. 

  • Reply 20 of 23
    Quote:

    Originally Posted by techguy911 View Post

     

     

    Apple can't step on, fight, and take over everyone in their way.  It makes sense for them to partner with existing banks.  Let the banks take care of handling the credit transactions and Apple can supply the technology.




    They CAN. But its not wise to do so. 

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