Apple’s new payments system Apple Pay is off to a good start: Customers are using it where it’s available — by December, two out of three dollars used for contactless payments were from Apple Pay — and it’s spreading to more locations like gas pumps, vending machines, parking meters, and even airlines soon.
More importantly, nearly half of all large US retailers say they plan to adopt Apple Pay by the end of next year.
So how did Apple nail its mobile payments solution? CEO Tim Cook offered some insight into Apple Pay on Tuesday, while speaking at the Goldman Sachs Technology and Internet Conference.
Cook explained why Apple Pay works: It respects people’s needs for privacy and security, which makes it trustworthy. Here’s Cook (big thanks to iMore’s Serenity Caldwell for this transcript):
It’s first and foremost a value. We believe that customers have a right to privacy. And that the vast majority of customers don’t want everyone knowing everything about them. … You are not our product. That is our product. … there’s no reason why anyone, or us, that we need to know where you’re buying something, what you’re buying, how much you’re paying, I don’t want to know any of that. It’s none of my business, frankly.
Cook says that over time, customers will “more and more go to people they trust with their data.” And Apple Pay works because it’s reliable, unlike credit cards, which are extremely vulnerable compared to Apple’s system that doesn’t show merchants your credit card number.
We knew that it had to be secure, because all of us are tired of people breaching our credit cards, and going online and having to reput in all of these numbers everywhere. I’m sure everyone in this room, or almost everyone in this room at least once that’s happened to. It’s happened to me three times.
With Apple Pay, we don’t — we never give the merchant your credit card number. We don’t even have it. We’re essentially making up a proxy for each individual transaction which prevents the passage of this number. Think about it for a minute, how secure can a card be when it has your number on the front, and this thing called a security code that anybody can see on the back!
Cook says he “would have never predicted” Apple Pay would be where it is now, just four months after its launch. Check out the transcript of Tim Cook’s Goldman Sachs talk here.