A Look At OS X Yosemite And iOS 8.1
by Brandon Chester on October 27, 2014 8:00 AM ESTApple's Foray Into Payments
Apple has made two announcements this year that show an expansion into areas outside of the technology industry. The first was Apple Watch, which is most definitely a technology product but looks positioned against the current premium watch industry just as much as against current smartwatches on the market. The second was Apple's foray into the payment industry, Apple Pay. While Apple Watch won't be around until next year, Apple Pay is here right now with one caveat. Apple Pay currently only works in the United States, or more specifically, only with a credit card issued by a United States bank. However, the service will eventually be expanded to support cards issued by banks in other countries.
How Apple pay works is fairly straightforward, that's the entire point of it. If the region on your device is set to the United States, the passbook app will contain a card that allows you to add a credit or debit card. You can then either type your info in, or use your camera to get the information from the card. Once the card is verified by your bank, you will have a card that appears in passbook and you're ready to start using Apple Pay. From the user's perspective, Apple Pay is simple and easy to use. But what goes on behind the scenes to keep everything secure can be quite complicated.
Security
The first thing to know is that your credit card information is never stored on the phone. Upon adding a credit card, the information is encrypted and sent to the appropriate issuing bank which confirms that the card is valid. A token is then sent back to the iPhone and stored in the secure element, which is essentially just an internal smart card chip. This token, not your credit card number, is what is used during payments. Apple's marketing and technical material refers to it as a Device Account Number. The token itself resembles a credit card number, but the only similarity between it and your card is the 4 digits on the end.
The use of tokens is where much of the security of Apple Pay comes from. By removing the actual credit card number from the equation, the merchant you're paying never gets to see your credit card number, security code, or your name. The token presumably is also only linked to the actual credit card via some database held by the bank, rather than some sort of equation that could be reverse engineered. This means that even in the event where a merchant is hacked and your token number shows up, it is entirely useless because it does not function as a credit card and is tied to the iPhone it was used on.
Beyond the overarching security, there's additional security at the time of payment. It begins with the use of Touch ID for authorizing payments. Although Touch ID launched with the iPhone 5s which does not have the necessary NFC hardware to use Apple Pay, I believe that this sort of service was the original goal when Touch ID was first being created. Paying with Apple Pay requires using Touch ID to verify your fingerprint. This prevents anyone from making purchases using your iPhone if it is lost or stolen.
One thing to note is that Apple Pay is not just a service for making purchases in stores. It also works for making purchases at online retailers than integrate it into their applications. All the security features that I've described apply to both in-store and online purchases, so there's no compromises on either side.
Going Forward
Making Apple Pay successful is going to take a lot of work on both Apple's part and on the part of retailers. Currently the service only works with cards from US banks, leaving out the rest of the world. Apple needs to expand the service much quicker than competitors have done so with theirs. For example, Google Wallet remains a US only service over 3 years after its initial launch. Apple Pay is not going to achieve success if it ends up in the same situation. Apple has given no timeframe for expansion to other countries, but if the iPhone 6 and 6 Plus get replaced by newer models before Apple Pay expands outside the US it will be a worrisome situation.
Apple also needs to convince retailers to support the service. The list of supported merchants on the Apple Pay section of their website has grown since its initial launch, and if Apple Pay is ever going to be a viable way to make everyday purchases that list needs to continue to grow. Work by banks to increase adoption of NFC capable terminals will also speed up this process, as Apple Pay works with existing NFC enabled checkouts. Apple also faces resistance from retailers that are partnered with other payment systems. Recently there have been reports that merchants who support the CurrentC mobile payment standard are disabling NFC on the payment terminals in their stores to block Apple Pay. I don't believe this will be an issue in the long term because consumers will realize when companies are prioritizing their own agenda over the customer's experience and they'll go to other retailers. If Walmart won't support Apple Pay and a customer wants to use it, they'll just go to Target instead.
As someone who doesn't live in the United States, I'm hopeful that the service will expand to Canada before this iPhone becomes obsolete. There are many obstacles in the way, but Apple appears to have put more effort into working with banks and merchants to get the service off the ground than any of the other mobile payment services we have today. How things play out will only be revealed with time.
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p_giguere1 - Monday, October 27, 2014 - link
Apple offers the max RAM the motherboard can support (16GB) at purchase.The only reason you might want to upgrade RAM yourself is to buy the 8GB RAM model only to tell yourself "I'll upgrade to 16GB down the road when RAM gets cheaper". You might save something like $100 by doing that as opposed to ordering 16GB RAM right away.
So essentially, what you're complaining about is the equivalent of "The 13" rMBP is $100 to expensive for me", correct? Would you not complain if the price dropped $100? Not only would it be equivalent financially, but you'd benefit from 16GB RAM right away and wouldn't have to deal with the RAM upgrade process. Or is this more of a matter of principle?
Cheesetogo - Monday, October 27, 2014 - link
Apple does not charge market value for RAM.ant1pathy - Tuesday, October 28, 2014 - link
Nor do they for the raw aluminum that the frame is made of. No company charges market value for their materials, that's what makes them a company.name99 - Monday, October 27, 2014 - link
Enter a coherent argument, not a random series of rants.Are you upset with every phone vendor because they solder their RAM? Are you angry that you can no longer change the tubes in your TV set? Are you livid that you can't open a Chromecast and change the flash storage?
The fact that people could change their RAM on PCs was a weird temporary anomaly of the PC world; it will go away because of the inevitable laws of physics, just like the ability to change your FPU has gone away and the ability to change your GPU will go away soon. Soldered RAM uses less power (relevant today) and can be run at higher frequencies (relevant tomorrow). What Apple is doing will be done by every vendor in three years because physics demands it.
LostAlone - Tuesday, October 28, 2014 - link
But soldered components are blatantly anti-consumer. The ability to change units is not just for power users who like to upgrade, it's critical for being able to service units. Things break sometimes, and being able to fix that yourself is pretty important. How would you feel if your car needed you to call a qualified Honda technician to change a flat tire?And no, the ability switch around components is not just a temporary thing. That is how systems exist and have done literally since the dawn of the personal computer. The first generation of home computers were sold as kits that you physically had to assemble yourself, chip by chip.
Ever since then ever generation of hardware has been built around interoperability and upgrading. The only places where you get soldered on CPUs in the PC market is in embedded systems and similar super-low powered systems like many Atom boards that come with the CPU attached. In every other non-mac system you can swap out parts.
Look at standards like SATA and PCI-Express - They exist specifically so end users can expand a barebones system over time; add a USB 3.0 card or an SSD hard-drive to an aging machine to extend it's life, or add a RAID card and totally repurpose the system into a server. These are important choices. The ability to do more with your hardware than just what it was capable of doing in the box is central to what being a PC user is. You can do more. I still use my ten year old PC as my headless network file server, because I can, because I have the option to do that.
So no, fixing your own PC isn't going anywhere, nor is upgrading. Sorry. Not happening. I cannot imagine why you would think otherwise. Just because Apple does something doesn't make it a good thing, and scrabbling around to find reasons to justify it when in fact what they are doing is flipping consumers the bird and declaring that they don't think you are smart enough to fix something yourself.
Ever since Apple gave up and OSX became just a different operating system running on stock PC hardware they have been trying anything to convince people that they are somehow getting something magically better, even though it's literally the exact same hardware. The fact that they STILL refuse to sell the OS separate to the hardware, even when that hardware is just normal every day PC components that they have assaulted with a soldering iron, is just wrong. It's part of a brand image that still relies on a lot of good will from the days when Macs actually were something different. Well, they aren't. And most users would be radically better of installing OSX onto another manufacturers PC.
The way that Apple handles their desktop and laptop exo system sucks. Don't apologize for them.
ex2bot - Tuesday, October 28, 2014 - link
Whatever your platform of choice (esp. Apple), itis inadequate and ill-advised. Thus I urge, nay, command you to immediately adopt my preferred platform as the obvious technically and morally superior choice. I'll be watching.You have been warned.
sunnohh - Friday, October 31, 2014 - link
12 years as a computer tech and I left to become a stock broker because I could very clearly see that everything should be soldered onto a single component. It's physically faster, tremendously increases reliability (no ram and cpu to unseat), and makes business sense for Apple or anyone serious about making money selling hardware. The industry is moving away from add on tointegrated components Apple isn't the only one: virtually every major manufacturers hi end ultra books are built exactly this way.As computers get faster and more integrated, replace and throw away is the only valid model. Upgrading hardware is nothing more than sentimental; replacing hardware is more economical.
We live in a throw away culture and computing is the ultimate disposable; mores law necessitates this.
Just ask component manufacturers they'll tell you this is happening; their sales prove it.
Buk Lau - Wednesday, October 29, 2014 - link
phones have soldered ram because of form factor. you really think you can fit a SO-DIMM slot inside a case that's less than a quarter of an inch? where did you get the fact that soldered RAM uses less power and can run at higher frequencies? so you are saying your soldered ram can beat 3000mhz DIMM ram? your "physics" seems very out of placemonopodman - Wednesday, October 29, 2014 - link
It's funny because I consider retina MBP one of the first Apple laptops actually worth buying compared to top competitors even regardless of OS X vs. Windows.... I'm totally fine with 16gb of RAM (and I don't care if it's soldered as long as it makes motherboard smaller due to easier routing) or built-in battery (I'd rather have one with higher capacity fit into a smaller and lighter enclosure).appliance5000 - Friday, October 31, 2014 - link
dunno - running an entire heavy graphic oriented system of an 11" air - faster than the old mac pro. Pretty amazing - though I agree regarding difficulty in upgrading -what's acceptable with a laptop is not so much with a desktop.On the other hand the new macpro is a beast and you can add stuff to it to your heart's delight.