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Everything you need to know about Apple Pay

Apple Pay allows you to make contactless payments using only your iPhone or Apple Watch. Here’s how it works and how you can use it in Australia.

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How does Apple Pay work?

For most Australians, contactless payments are nothing new. Most credit cards support tap and go payments, whether it’s using Visa’s underlying payWave infrastructure or Mastercard’s PayPass.

Apple Pay fundamentally works the same way, except instead of digging your credit card out of your wallet and tapping it on the terminal, you tap your iPhone or Apple Watch. Your fingerprint or a secure code is used to verify each purchase made from your chosen bank account or credit card.

The inclusion of NFC (Near Field Communication) chips built into these devices creates a "virtual" card and doesn't distinguish between whether it’s a payWave or PayPass card, or an Apple Pay device. Apple Pay isn’t the only competitor in the smartphone payments space, with Google’s Android Pay and Samsung Pay also set to launch in Australia by the end of 2016.

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Is Apple Pay secure?

Apple Pay is as secure as a standard NFC "tap and go" credit card. It uses the same underlying infrastructure that authorises card payments, but Apple Pay’s usage of fingerprints for biometric authentication gives it an added layer of security. As that fingerprint data is stored securely on the device, it can't be stolen from elsewhere in the network. This feature gives Apple Pay an added layer of security when compared to credit cards.

People won't be able to get your fingerprint data, so they won't be able to make unauthorised transactions even if they steal your phone. A stolen credit card, on the other hand, can be used for small transactions (typically under $100) without additional verification.

It’s worth noting that if you’re using the Apple Watch as your Apple Pay device, a passcode is used instead of TouchID. This feature is slightly less secure, although the fact that no identifying credit card information – your credit card number, expiry date and so on – is stored or visible on an Apple Watch or iPhone during an Apple Pay transaction means it’s more secure. The usual protections that your institution offers against fraud should also apply to any Apple Pay transaction.

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What do I need to use Apple Pay?

To access Apple Pay you need an iOS device with Apple Pay compatibility. On the iPhone side, that’s the iPhone 6, iPhone 6 Plus, iPhone 6s, iPhone 6s Plus and iPhone SE. If you’ve got an Apple Watch, you can use it with any of those devices, as well as the iPhone 5, 5c and 5s.

You don’t have to update your iOS installation on your iPhone every time there’s a new update, but if you’re on an older iPhone device with a much older iOS variant, you may have to update to access Apple Pay. Once you’ve passed that hardware hurdle, you need a financial institution that supports Apple Pay in Australia.

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Which banks support Apple Pay in Australia?

Apple Pay launched in the US back in 2014, but has been remarkably slow coming to Australia. American Express was the first to launch Apple Pay down under in late 2015, and even then it was only for cards directly issued by Amex. No other Amex cards offered Apple Pay because the interchange rate that Apple wanted from the banks for each Apple Pay transaction led to lengthy negotiations.

The first of the big banks to jump on the Apple Pay bandwagon in Australia was ANZ, which now offers Apple Pay to its customers and has seen a significant rise in that customer base. It’s expected that the other major banks will get on board with Apple Pay, simply due to the widespread use of iPhone devices in Australia.

It’s worth noting that if you hold a credit card from a financial institution in a country where Apple Pay has already rolled out – for example, the USA or UK – you may be able to use Apple Pay through your overseas card while travelling in Australia. Check with your provider prior to travelling.

Comparison of Credit Cards with Apple Pay

Updated April 9th, 2020
Name Product Bonus Points Rewards program Rewards Points per $ spent Purchase rate (p.a.) Annual fee
HSBC Platinum Credit Card - Balance Transfer Offer
HSBC Rewards Plus
Visa/MC
1
19.99% p.a.
$129 p.a.
Enjoy a balance transfer offer, yearly annual fee refund, airport lounge passes and complimentary insurance covers.
ANZ Low Rate
12.49% p.a.
$0 p.a. annual fee for the first year ($58 p.a. thereafter)
Save with 0% p.a on balance transfers for 22 months (with a 1.5% BT fee) and $0 first year annual fee. Plus a 12.49% p.a. purchase interest rate.
ANZ First
20.24% p.a.
$30 p.a.
Get up to 18 months interest-free on balance transfers and save with a low $30 annual fee. Plus, up to 55 days interest-free on purchases.
ANZ First for Students
20.24% p.a.
$0 p.a. annual fee for the first year ($30 p.a. thereafter)
An ideal, low limit credit card for full-time tertiary students with up to 55 days interest-free on purchases and a $0 annual fee for the first year.
ING Orange One
11.99% p.a.
$0 p.a.
Keep costs low with $0 annual fee and 100% foreign transaction fee rebates. Available when you hold or open an Orange Everyday account.
Coles Low Rate Mastercard
flybuys
Visa/MC
0.5
12.99% p.a.
$58 p.a.
Save with a low purchase interest rate, earn flybuys points as you spend and get up to 55 days interest-free.
Bendigo Bank Low Rate Mastercard
11.99% p.a.
$45 p.a.
A no-frills credit card with a competitive annual fee and 0% p.a. interest rate on balance transfers for the first 18 months.
American Express Qantas Business Rewards Card
140,000 bonus points
Qantas Business Rewards
Amex
1.25
N/A
$450 p.a.
ABN holders w/ $75,000 revenue. Get up to 140,000 bonus points, 3x points on eligible Qantas flights & 2 lounge passes per year.
Qantas American Express Ultimate Card
100,000 bonus points
Qantas Frequent Flyer
Amex
1.25
20.74% p.a.
$450 p.a.
Get 100,000 bonus Qantas Points, a $450 Qantas Travel Credit and 2 yearly complimentary Qantas Club lounge invitations. Ends 14 Apr 2020.
American Express Velocity Platinum Card
50,000 bonus points
Velocity Frequent Flyer
Amex
1.25
20.74% p.a.
$375 p.a.
Get 50,000 bonus Velocity Points when you spend $3,000 for the first 3 months. Plus, 100 Status Credits and luxury travel perks.
American Express Gold Business Card
Membership Rewards Ascent
Amex
1.5
N/A
$169 p.a.
ABN holders w/ $75,000 revenue. A business card with no pre-set spending limit, data feeds to MYOB and up to 51 days to pay for purchases.
American Express Velocity Business Card
Velocity Frequent Flyer
Amex
1
N/A
$249 p.a.
ABN holders w/ $75,000 revenue. A business charge card offering Velocity Points per $1 spent and up to 51 days interest-free on purchases.
American Express Velocity Escape Card
Velocity Frequent Flyer
Amex
0.75
20.74% p.a.
$0 p.a.
Earn uncapped Velocity Points on purchases and save with a $0 annual fee for life.
ANZ Platinum Credit Card
20.24% p.a.
$0 p.a. annual fee for the first year ($87 p.a. thereafter)
Receive a 0% p.a. for 18 month balance transfer offer and a $0 first year annual fee. Plus, complimentary overseas travel and medical insurance.
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