After launching its new mobile wallet service Apple Pay during yesterday’s keynote, the company gave demos afterwards, TechCrunch sharing a video.

The card you have registered with your Apple ID becomes your default card, but you can add others by using the camera on the iPhone 6 to identify it. The iPhone requests permission from your bank, and the card is then added to Passbook … 

Using your default card at a compatible contactless payment terminal is as simple as holding out your iPhone. Once it is within range of the terminal, it automatically opens Passbook and displays your default card. Check the amount, place your finger on the Touch ID sensor and you’ve paid.

Want to use a different card? Simply scroll through the stored cards to select the one you want.

It appears that Apple Pay overcomes the two key drawbacks of existing contactless cards: security and transaction limits.

Contactless cards have been commonplace in the UK for some time now, and you use them in much the same way as shown in the demo: just touch the card to the terminal. But as there is no form of authentication beyond checking that the card isn’t listed as stolen, a thief could make a number of transactions before a flurry of purchases raises a fraud flag.

To counter this, card terminals place a transaction limit on contactless card payments, typically equivalent to $35-50. Apple Pay solves the first problem, by requiring fingerprint authentication, and this suggests that it may also solve the second, as there would no longer be a need for transaction limits.

The Apple Watch offers a route to using Apple Pay for owners of the iPhone 5/s/c. This may mean transaction limits apply to purchases made with the device, but it’s also been suggested that it may be possible to authenticate the watch each morning, that authentication remaining valid for so long as the watch is in contact with your wrist.

Thanks, Tim Jr

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Ben Lovejoy

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