How does Apple Pay work?

A woman smiles as she uses Apple Pay to purchase coffee from a barista at a cafe.Image: A woman smiles as she uses Apple Pay to purchase coffee from a barista at a cafe.

In a Nutshell

If you’re an Apple mobile user looking for a fast and secure way to pay, Apple Pay should be on your radar. But without an Apple device, it won’t be an option for you.
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A mobile payment like Apple Pay can be a convenient alternative to cash, credit cards and checks.

To make a payment, you tap a button with your phone and hold it near the contactless reader. Apple Pay also adds a layer of extra security and reduces the risk of loose cash or credit cards getting stolen.

If you use Apple products, you might want to consider Apple Pay as a payment method. Let’s take a closer look at how Apple Pay works so you can decide if it’s a good option for you.

What is Apple Pay, and how does it work?

Apple Pay is built into all Apple devices including iPhones, Apple Watches, Macs and iPads. This means you don’t have to download a new app to use it. It’ll allow you to pay for purchases in stores, online and within apps that accept contactless payments.

Once you add your credit, debit or prepaid card to the Wallet app on your device, you’ll be ready to shop with Apple Pay. You’ll continue to earn cash back, points and the other rewards your credit card may offer.

Pay with your iPhone in stores

To use your default card and pay with your iPhone, either double click the side button (if you have face ID) or double click the Home button. Then you’ll either enter your password, unlock with Face ID or place your finger on the Touch ID sensor.

To use a different card, tap your default card so you can choose the right one. When you’re ready to check out, hold the top of your iPhone near the card reader until a checkmark and the word “Done” pop up on your phone.

Pay with your Apple Watch in stores

Once you double-click on the side button of your watch, your default card should open. If you’d like, you can scroll down to use a different card. Then, place the display of your watch near the card reader. As soon as you feel a tap and hear a beep, you should be good to go.

Pay online or within apps

First, tap Apple Pay or choose it as your payment method. Hit “Next” if you want to use a different card. If you haven’t already done so, enter your contact, billing and shipping info. If you’re using an iPhone or iPad with Face ID, double click the side button and use your Face ID or plug in your pass code.

To confirm your payment with an iPhone or iPad without Face ID, use Touch ID or your password. If you’re paying with your Apple Watch, just double click the side button. To pay with your Mac, place your finger on the Touch ID and follow the prompts or use your Bluetooth-connected iPhone or Apple Watch to complete the process. No matter how you choose to pay, the word “Done” and a checkmark appear if the payment went through.

How secure is Apple Pay?

Apple Pay touts itself as a safer payment method than physical debit cards and credit cards. Here’s why.

  • You can’t use it unless you log in with your Face ID, Touch ID or passcode.
  • Whenever you make a purchase, merchants won’t have access to your identity and card number.
  • Since Apple Pay creates a unique transaction code and number for your device, your card number won’t be saved on your device or Apple servers.
  • You won’t have to carry around cash or credit cards, which may get lost or stolen.

Where can you use Apple Pay?

Apple says more than 85% of U.S. retailers accept Apple Pay, so you can use it many places. It’s a convenient way to pay for anything in stores, online and in apps. You may use Apple Pay for everyday purchases as well as one-time, big-ticket expenses.

As long as a merchant accepts contactless payments, Apple Pay is an option. You can even use it at vending machines or in taxis and subway stations. Users can also use it to access Apple Cash and send or receive money from friends and family through the Messages app.

If you travel abroad, Apple Pay is accepted in other countries. But with international use, you may be on the hook for bank transaction or credit card fees.

Is it a good idea to use Apple Pay?

Apple Pay is only available to you if you own an Apple product like an iPhone, Apple Watch, Mac or iPad. So if you have an Android or other type of device, you’ll need to explore alternative mobile payments. Here are a few to consider.

  • Venmo: The Venmo app lets you send and receive money for free in many instances. It also has a useful feature you can use to split payments like utilities with your roommates or dinner with friends.
  • Google Pay: Similar to Apple Pay, Google Pay lets you link a debit or credit card to its Google Pay app. You can then pay with your mobile device at checkout. It also helps you bypass entering your shipping and card payment information when you check out online.
  • PayPal: Once you create a free PayPal account online or through the PayPal app, you’ll be able to pay and get paid for a fee. With PayPal.Me, you can create custom links and send them to people any time you want to collect a payment.
  • Zelle: As long as your bank offers Zelle, it can be a good way to send and accept money. Depending upon the bank, you or your recipient may get money right away, or it might take up to three business days. Zelle doesn’t charge you to send or receive money, but you’ll want to check that your bank doesn’t either.
  • Cash App: Cash App (formerly known as Square Cash) allows you to instantly pay anyone for free. It also offers a free debit card for day-to-day spending and the option of getting your paychecks up to two days early.

What’s next?

Digital banking has increased the number of options you have for mobile payments. Before you choose the payment methods you prefer, make sure to research any fees and figure out your level of comfort with any safety measures the app provides.

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA in marketing from Roosevelt Un… Read more.