Apple says that it can't see any of your data when you pay with Apple Pay, as everything is encrypted. Google Pay, however, tells its customers that it may save some data. — dpa
As more and more alternative payment methods become available around the world, cash looks like it could become obsolete some day. Time to get familiar with some of the most popular digital payment methods.
Slowly but surely, we're getting closer to a world where physical money is completely obsolete. Already fewer and fewer people are carrying around cash, instead preferring to pay by other, more convenient methods: by card, with apps like PayPal and using smartphone systems like Apple Pay and Google Pay.
So how do smartphone payment systems work? Here are some answers to some of the most important questions.
Does it matter what bank I'm with?
When it comes to what kind of credit card or bank you use, you may notice a difference between Apple Pay and Google Pay. The list of banks the two systems support varies, also depending on which country you live in. Apple Pay supports banks such as Deutsche Bank and American Express, whereas Google Pay does not have Deutsche on its list.
Apple has a full list of all the financial institutions it supports on its website, as does Google. Google Pay can also be connected to your PayPal account as well as other bank accounts, if that's preferable to you.
Both systems are easy to set up: add your credit or debit card to your smartphone within minutes by following the instructions online. The cards and accounts can then be found in your virtual wallet.
Where can I use these payment methods?
Again, this can depend on where you live, and how popular Apple and Googe Pay are in your country. But generally speaking, you can tell if a place accepts these methods if you can find the symbols: if the retailer has a "G Pay", "Apple Pay" or a contactless payment symbol, then you're in luck.
Can I pay with a smartwatch?
Yes – it's actually much simpler than doing it with a phone. If you have an Apple Watch connected to Apple Pay, then all you need to do is hold the device up to the payment terminal and press the side of the watch twice to activate Apple Pay, which is then ready for one minute.
You don't even have to unlock the watch beforehand. As long as you have verified yourself at some point earlier in the day, you're good to go. The same idea works for Android smartwatches from brands such as Fossil, Diesel, Armani, Michael Kors or others.
With your iPhone, you will have to unlock the phone with a PIN, fingerprint or some other secure login method like FaceID or TouchID, before every payment.
How secure are these payments?
Paying with your phone is fast – and that may make you wonder if that means it's insecure, as there seem to be no barriers in place.
But you needn't worry: the system doesn't actually save your real data, but creates a virtual credit card with a separate number.
This is then used for payments – and if your phone is stolen, the bank won't need to cancel your real card, but will only need to delete the virtual card, which is called a token. The token system also means the data can't be hacked or scammed.
Google Pay allows you to make purchases up to a certain limit (€25 (RM117) in Europe) without any further verification, which is similar to contactless payment with a card. If you're paying more, then you need to verify your identity in some way, either by putting in a PIN, or with a fingerprint sensor or face recognition.
What about my privacy?
Cash has always been considered to be unbeatable in terms of privacy, as it leaves no traces. All you can tell is how much money was withdrawn from an account in total, and not where how much was spent.
Cash will always have this advantage over any other system, but smartphone payments at least protect your identity from retailers. The only information given out is how much money was transferred, and which bank it's coming from.
Apple says that it can't see any of your data, as everything is encrypted. Google Pay, however, tells its customers that it may save some data – so if that bothers you, stay away.
Does this service cost extra?
Both Apple Pay and Google Pay are free for customers and retailers. However, Apple does charge banks for the service – but no one knows how much. Experts in the United States say it could be around 0.15% of the transaction – in Europe it is likely to be less. – dpa
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