Apple Pay: An in-depth guide


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  1. Introduction
  2. How does Apple Pay work?
  3. Where is Apple Pay used?
  4. Who uses Apple Pay?
    1. Individual user types
    2. Business user types
  5. Benefits of accepting Apple Pay
  6. Apple Pay security measures
  7. Accepting Apple Pay as a payment method
  8. Alternatives to Apple Pay
    1. Google Pay
    2. Samsung Pay
    3. Additional digital wallets
    4. Contactless payment cards
    5. QR code payments
    6. Asia Pacific
    7. Europe
    8. Latin America
    9. Africa

Apple Pay is a mobile payment and digital wallet platform that lets users make purchases in stores, through apps, and on websites using Apple devices such as iPhones, Apple Watches, iPads, and Macs. Apple Pay boasts over 500 million users globally and dominates the US digital wallet market with a share of over 90%.

Apple Pay’s capabilities have grown to include features such as Apple Cash for person-to-person payments and the Apple Card, a credit card. This integration with a range of Apple services and devices provides a comprehensive financial experience for users. The platform uses advanced technology with extensive security and privacy features, securing transactions with industry-leading encryption. Apple Pay is also known for its use of biometric authentication methods such as Touch ID and Face ID.

Apple Pay is supported in nearly 100 countries and regions, a global reach made possible through partnerships with a wide range of banks and financial institutions that enable easy integration with international bank accounts and credit cards. Apple Pay has substantially affected the global payment market, illustrating the growing shift toward digital and mobile payment methods worldwide.

Businesses considering integrating Apple Pay as a payment method should understand the platform’s technical requirements, transaction processes, and user experience, including how Apple Pay integrates with point-of-sale systems and online payment gateways. This guide will cover what businesses need to know about working with Apple Pay.

What’s in this article?

  • How does Apple Pay work?
  • Where is Apple Pay used?
  • Who uses Apple Pay?
  • Benefits of accepting Apple Pay
  • Apple Pay security measures
  • Accepting Apple Pay as a payment method
  • Alternatives to Apple Pay

How does Apple Pay work?

Apple Pay uses a combination of hardware, software, and security protocols to facilitate secure and convenient transactions in a wide range of business scenarios. Devices that run Apple Pay, including iPhones, Apple Watches, iPads, and Macs, must have the necessary hardware for accepting contactless payments, such as a near-field communication (NFC) chip. Throughout the transaction, Apple doesn’t store the user’s credit or debit card information nor does it keep transaction information that can be tied to the user. All Apple Pay transactions are protected with tokenization: each credit or debit card that a user adds to the app gets a unique Device Account Number, which Apple Pay uses during transactions in place of the real card number.

Here’s how users set up Apple Pay and complete transactions:

  • Setting up: First, users add a credit or debit card to their Apple Wallet app. Users can scan their card with the device’s camera or enter the details manually. Apple Pay securely sends the card information to the card issuer for verification. Once a user adds a card successfully, Apple Pay generates the Device Account Number that it encrypts and stores in the device’s Secure Element, a specialized chip.

  • Making in-store payments: When paying at a store, users hold their device near the contactless reader, which will automatically open the Apple Pay app. The NFC chip in the device communicates with the terminal and transmits the Device Account Number and a transaction-specific dynamic security code. The user authenticates the payment through Touch ID, Face ID, or the device passcode.

  • Making online payments: For online or in-app purchases, users select Apple Pay as the payment method, then authenticate the purchase through Touch ID, Face ID, or passcode. The transaction is completed using the Device Account Number, which maintains the security of the card details.

  • Making person-to-person payments: With Apple Cash, users can send and receive money through Messages or by using Siri. Funds a user receives are stored in the Apple Cash card in the Wallet app and can be used for purchases or transferred to a bank account.

Where is Apple Pay used?

Apple Pay has an impressive global reach with over 500 million active users. The global contactless payments market was valued at $34.5 billion in 2021 and is projected to grow by 19% annually through 2030, with digital payments in Southeast Asia and Africa expected to show major growth as smartphone penetration and contactless infrastructure expand in those regions. Apple Pay’s presence and usage in each major geographic region is outlined below.

Who uses Apple Pay?

Customers and businesses worldwide use Apple Pay for a growing range of transactions. Apple Pay users find it faster and more convenient than traditional payment methods, and Apple Pay’s security features, including tokenization and biometric authentication, offer additional peace of mind. Apple Pay users also trust Apple’s commitment to data privacy, which contributes to the platform’s high adoption. Apple Pay is used for transactions that include in-store purchases, peer-to-peer fund transfers, in-app purchases, and online shopping, for which Apple Pay ranks in the top five payment methods at checkout.

Apple Pay’s primary user groups are outlined below.

Individual user types

  • Millennial and Generation Z customers: Apple Pay adoption is highest among millennials (26–41) and Gen Z (10–25). Apple Pay is used by 51% of millennial digital wallet users and 73% of Gen Z digital wallet users.

  • High-income customers: Apple Pay is popular with individuals who earn higher-than-average incomes. The median income of iPhone app users is $85,000, compared with $61,000 for Android app users.

  • Tech-savvy customers: People who adopted mobile payments early are also more likely to use Apple Pay.

  • Urban dwellers: Apple Pay usage tends to be higher in cities with developed contactless infrastructure as compared with rural areas.

Business user types

  • Retail: More than 85% of US retailers accept Apple Pay.

  • Transportation: Public transit systems around the world allow users to pay their fare using Apple Pay.

  • Hospitality: Hotels and restaurants support Apple Pay as a payment option to streamline check-in and payment processes.

  • Entertainment: Movie theaters and concert venues accept Apple Pay for ticket purchases and concessions.

Benefits of accepting Apple Pay

Apple Pay has evolved into a complex tool capable of driving major business transformations. The platform can improve operational efficiency, enhance customer experiences, and propel revenue growth. Businesses using Apple Pay may see these benefits:

  • Faster transactions: Apple Pay’s streamlined payment process reduces checkout times, leading to shorter customer queues, improved throughput, and a leaner operational footprint. This also improves the customer experience, potentially encouraging repeat visits.

  • Automated processes: Apple Pay’s digital transactions remove the need for manual interventions and reduce operational costs associated with payment processing.

  • Access to transaction data: Apple Pay’s real-time transaction data provides numerous business advantages with insights into customer spending patterns, preferences, and demographics. Access to this data lets businesses improve their inventory management, accurately forecast sales, personalize marketing campaigns, enhance product offerings, and make other important data-driven decisions.

  • Improved security: Apple Pay’s biometric authentication and tokenization safeguard sensitive financial information, building customer trust and confidence.

  • Personalized engagement: Apple Pay integrates with loyalty programs and reward systems to enable personalized offers and promotions. This creates a deeper connection with customers, potentially leading to greater engagement.

  • Higher-value transactions: The convenience and security of Apple Pay can encourage customers to spend more, with one case study reporting a 10% increase in average order value when customers used Apple Pay.

  • Reduced cart abandonment: Apple Pay’s smooth checkout experience can minimize cart abandonment, especially on mobile devices, translating to an increase in sales conversions and further fueling revenue growth.

  • Diversified revenue streams: Apple Pay generates new revenue streams through solutions such as in-app purchases and contactless ticketing.

  • Better fraud defense: Apple Pay’s advanced security features protect businesses from potential financial losses by fighting fraudulent activities.

  • Competitive advantage: Integrating Apple Pay can help businesses stand apart from their competition and demonstrate a commitment to innovation and focusing on customers. Apple Pay can attract tech-savvy customers and improve brand perception while helping future-proof the business as digital payment technology evolves.

Apple Pay security measures

Apple Pay security includes the following security measures to protect sensitive financial information:

  • Secure Enclave: The Secure Enclave is a dedicated chip built into Apple devices that acts as a secure hardware vault for sensitive data such as credit card information and biometric credentials. The chip is physically isolated from the rest of the device’s operating system, making it difficult for hackers to access its data.

  • Secure Element: This is a separate chip, also in Apple devices, that handles contactless payments using NFC technology. It is responsible for securely storing and managing tokens (encrypted versions of credit card information) used for Apple Pay transactions.

  • Touch ID and Face ID: Biometric authentication provides an additional layer of security to Apple Pay transactions. Only authorized users with a valid fingerprint or facial scan can access and use Apple Pay.

  • Encryption: All data on an Apple device, including payment information, is encrypted by default using Advanced Encryption Standard (AES) 256, a robust and widely recognized encryption standard that renders data unreadable even if another person gains physical access to the device. Apple Pay also uses NFC technology to communicate with contactless payment terminals, providing an additional layer of encryption. All data transmitted via NFC is encrypted using industry-standard protocols such as Transport Layer Security (TLS) and Secure Sockets Layer (SSL).

  • Dynamic tokens: Instead of transmitting credit card details, Apple Pay uses a dynamic tokenization system that replaces card details with a unique cryptographic token, which is sent to the payment terminal. This eliminates the risk that card information will be exposed during the payment process. Each token is valid for a single transaction, so even if a bad actor intercepts a token, they cannot use it for any other transaction.

  • Secure payment gateways: Apple partners with trusted and PCI-compliant payment gateways that adhere to strong security protocols.

  • Real-time monitoring: Apple’s sophisticated fraud detection systems monitor transactions for anomalies and suspicious activity, analyzing transaction patterns, geolocation data, and other relevant factors to identify and prevent fraudulent use.

  • Risk scoring: Each Apple Pay transaction is assigned a risk score. Transactions deemed high risk can be flagged for additional verification or blocked for user protection.

  • Granular access control: Businesses have full control over Apple Pay access within their organizations and can define which employees can access and use Apple Pay, set spending limits, and implement mandatory authentication requirements.

  • Transaction auditing: Businesses can access detailed transaction logs within the Apple Business Manager. This provides comprehensive visibility into all Apple Pay transactions and enables effective monitoring and reconciliation.

  • Dedicated security teams: Apple invests substantial resources into security research and development for Apple Pay to ensure the platform remains resilient against emerging threats. It also conducts regular independent security audits of its systems and infrastructure so it can promptly address vulnerabilities.

Accepting Apple Pay as a payment method

Depending on a business’s payment gateway, accepting Apple Pay might require little (or no) setup. But businesses still must meet certain requirements to get started with Apple Pay. Basic requirements include possessing all necessary business registrations and licenses in their operating region and adhering to all relevant laws and regulations. This includes following all applicable tax regulations and collecting and remitting taxes as mandated as well as implementing Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures to verify customer identities and prevent illicit activities.

Businesses must also comply with relevant data privacy regulations such as the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) and with the Payment Card Industry Data Security Standard (PCI DSS) for secure payment card handling.

In addition to ensuring this legal and regulatory compliance, businesses must have the following basic technical capabilities:

  • Supported devices: Apple Pay works on iOS devices with NFC capabilities, including iPhones, iPads, and Apple Watches.

  • Internet connection: Businesses must have a stable internet connection to process transactions through Apple Pay.

Businesses must work with a payment gateway to accept Apple Pay payments. Each gateway has its own setup needs. Stripe requires little setup because its hardware and software are equipped to accept Apple Pay. Before setting up any payment method, businesses should carefully review the terms and conditions in their merchant agreements, all associated costs and fees, and their access to customer support from service providers in case of any technical issues or inquiries.

Businesses that want to set up Apple Pay through Stripe must complete these steps:

  • Set up Stripe account: Businesses must have a fully functional Stripe account with the necessary permissions for accepting payments through Apple Pay. Businesses that don’t have a Stripe account will need to sign up for Stripe and activate an account. At this stage, businesses should also confirm their Stripe account supports the currencies they plan to accept through Apple Pay.

  • Configure Stripe Connect: Next, businesses must set up Stripe Connect and link their Apple Pay merchant account.

  • Integrate Stripe API or SDK: Businesses must have the Stripe application programming interface (API) or software development kit (SDK) integrated into their app or website to send payment requests and receive payment confirmations.

  • Complete Apple Pay setup: Businesses must follow Apple’s specific setup instructions to enable Apple Pay within their app or website.

  • Test functionality: Businesses should test their integration thoroughly before opening Apple Pay to customers.

Alternatives to Apple Pay

Despite Apple Pay’s dominance in the market, businesses and customers have numerous payment method alternatives. The most popular alternatives to Apple Pay in the US are outlined below.

Google Pay

Google Pay has a vast reach and is compatible with most Android and iOS devices with NFC capabilities, which can be a major advantage for businesses that cater to a diverse customer base. For businesses already widely using Google, Google Pay integrates with Google Play Store, Google Ads, and other services, streamlining the payment process. From a customer perspective, Google Pay has a user experience comparable with that of Apple Pay. Google Pay is steadily gaining market share, particularly in Android-dominated regions.

Samsung Pay

Samsung Pay has an unmatched security system, using its proprietary magnetic secure transmission (MST) technology alongside NFC. It’s compatible with almost any payment terminal, even older models, and its enhanced security can be valuable for businesses that deal with sensitive transactions. Samsung Pay also integrates with Samsung’s loyalty program, Samsung Rewards, which lets businesses offer incentives to customers through points and rewards. Samsung commands a large market share in the smartphone industry, particularly in Asia, which translates to a ready customer base for businesses that accept Samsung Pay. However, Samsung’s reach is confined to Samsung devices.

Additional digital wallets

Many banks and payment providers have digital wallets. Often, these come with tight integration with the existing banking platforms and financial services, which can create a convenient and familiar experience for customers who already use those services. Some of these digital wallets also have rewards programs and promotions, offering businesses an additional method to attract and retain customers. Digital wallets that are tailored to specific markets and regions and cater to local preferences can be beneficial for businesses that operate in those areas, though some local digital wallets may not be as interoperable as more widely adopted solutions such as Apple Pay and Google Pay.

Contactless payment cards

Contactless cards have the widest possible acceptance and work at almost any payment terminal that supports contactless payments. This creates a smooth transaction experience for customers, regardless of their smartphone preference. Businesses don’t need additional hardware to accept contactless cards, which makes this method a simple and cost-effective solution. Contactless cards minimize the learning curve for customers and businesses by building upon the familiar concept of traditional credit and debit cards. Though contactless cards are convenient, potential security concerns mean businesses must ensure proper security measures are in place to protect customer data.

QR code payments

QR code payments eliminate the need for physical contact with payment terminals, which is ideal in situations in which hygiene is a concern. They require minimal setup costs for businesses, making them a viable option for small businesses or those looking for a cost-effective solution, and they can be processed quickly, reducing wait times and improving customer satisfaction. QR code payments may have a limited reach compared with more established solutions because they have yet to achieve widespread adoption.

Outside the US, there are several regional alternatives to Apple Pay.

Asia Pacific

  • Alipay: Alipay has over 900 million users and integrates with various online and offline services. Its dominance extends to other Asian markets, making it an important option for businesses operating in this region.

  • WeChat Pay: Tencent’s WeChat Pay closely rivals Alipay in China, offering similar features and a user base of more than 900 million. Its integration with the WeChat social media platform further strengthens its position.

  • OVO: OVO dominates the Indonesian market with a comprehensive digital wallet solution for peer-to-peer payments, bill payments, and investment options.

  • Paytm: India’s leading digital wallet, Paytm offers a wide range of financial services including payments, micro-loans, and wealth management.


  • Google Pay: Google Pay is widely used in Europe, especially among Android users. Its integration with Google services and its growing market share in Europe make it a powerful contender for businesses across the region.

  • Samsung Pay: Samsung Pay has a large user base in Europe, particularly among Samsung device users. Its MST technology and loyalty program integrations offer businesses distinct advantages.

  • Swish: Sweden’s Swish has achieved near-universal adoption with over 8 million users in the country. Its focus on instant, peer-to-peer payments makes it a convenient solution for businesses in the region.

  • MB WAY: Portugal’s MB WAY boasts over 4 million users on its comprehensive platform for mobile payments, bill payments, and public transportation ticketing.

Latin America

  • Mercado Pago: Mercado Pago leads the Latin American market with its comprehensive suite of financial services including mobile payments, online payments, and point-of-sale solutions. Its integration with the Mercado Libre marketplace further strengthens its reach.

  • Nubank: Brazil’s digital-first bank Nubank is a popular digital wallet with features such as bill payments, prepaid cards, and investment tools.

  • Tpaga: Colombia’s Tpaga is a versatile digital wallet solution for businesses and individuals that facilitates payments, bill payments, and donations.

  • Clip: Mexico’s Clip is a convenient mobile payment solution for businesses that focuses on point-of-sale payments and contactless transactions.


  • M-PESA: M-PESA operates across East Africa and has revolutionized mobile payments with its peer-to-peer transfer services and wide agent network. Its success demonstrates the potential of digital wallets in unbanked and underbanked regions.

  • EcoCash: Zimbabwe’s EcoCash has over 7 million users on its comprehensive platform for mobile payments, bill payments, and insurance services.

  • Orange Money: Orange Money operates across several African countries and uses the extensive Orange telecom network to provide mobile financial services including payments, transfers, and savings accounts.

  • Wave: Senegal’s Wave is a simple and affordable mobile money platform that’s popular among the unbanked population.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accurateness, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent attorney or accountant licensed to practice in your jurisdiction for advice on your particular situation.

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