Apple Pay is a mobile payment that works with Apple Wallet, a 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 more than 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 (POS) 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?
  
• How to set up and accept Apple Pay as a payment method
  
• Benefits of accepting Apple Pay
  
• Apple Pay costs and fees
  
• Apple Pay security measures
  
• Where is Apple Pay used?
  
• Who uses Apple Pay?
  
• Alternatives to Apple Pay
  
• How Stripe can help
  

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.

How to set up and accept Apple Pay as a payment method

Accepting Apple Pay may require minimal setup, depending on a business’s payment gateway. But there are still key requirements to meet before getting started.

Businesses must have the proper registrations and licenses for their region and comply with all relevant laws and regulations. This includes following tax rules, collecting and remitting taxes as required, and implementing Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures to verify customer identities and prevent fraud.

Businesses must also comply with local data privacy regulations such as the EU’s General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA). And every business handling cardholder data must comply 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:

• Contactless/NFC-enabled terminal: Apple Pay works with contactless payments, or NFC capabilities. Make sure the terminal is certified for Apple Pay, and be sure to enable it in the point-of-sale (POS) settings. Customers can tap their iOS devices to pay, including iPhones, iPads, and Apple Watches.

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

• Merchant account or payment processor that supports Apple Pay: Businesses must work with a payment gateway to accept Apple Pay payments, and each one has its own setup needs. Stripe requires little setup because its hardware and software are already 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.

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 benefit from:

• Faster transactions: Apple Pay speeds up checkout, reducing wait times and improving the customer experience. These can encourage 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 gives businesses real-time insight into customer behavior, helping them manage inventory, forecast sales, personalize marketing, and make smarter decisions.

• Improved security: Apple Pay’s biometric authentication and tokenization protects 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 increasing engagement.

• Higher-value transactions: The convenience and security of Apple Pay can encourage customers to spend more.

• Reduced cart abandonment: Apple Pay’s smooth checkout experience can minimize cart abandonment, especially on mobile devices, which can increase sales conversions and 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: Offering Apple Pay helps businesses stand out, attract tech-savvy customers, and show a focus on innovation—while staying ahead as digital payments evolve.

Apple Pay costs and fees

Businesses must use a payment gateway to process Apple Pay transactions, and these gateways typically charge fees per transaction. They also sometimes charge monthly fees, depending on the gateway and the volume of transactions processed. Each payment gateway will have its own fee structure, and you can find Stripe’s fee structure for Apple Pay transactions here.

Because Apple Pay is linked to a credit or debit card, businesses processing Apple Pay transactions will also incur fees associated with accepting card payments. For each Apple Pay transaction, businesses must pay interchange fees, a card payment fee that networks and issuing banks charge. The interchange fee structure is complex and varies depending on the card type, network, and issuing bank. Read more about Visa’s US interchange fees and Mastercard’s US interchange fees.

Finally, businesses accepting Apple Pay are also subject to chargeback fees related to these transactions. If a customer initiates a chargeback and wins the dispute, the business may need to pay a chargeback fee to its bank.

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: Apple devices encrypt all data by default, using Advanced Encryption Standard (AES) 256. This keeps payment information secure even if another person gains physical access to the device. Apple Pay adds another layer of protection with encrypted NFC technology communication using trusted security 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 uses a unique cryptographic token, which is sent to the payment terminal. This prevents card information from being 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, 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.

Where is Apple Pay used?

Apple Pay has an impressive global reach with more than 624 million active users. The global contactless payments market was valued at $52 billion in 2024 and is expected to reach $196 billion by 2033. In the United States, nearly 90% of consumers now use contactless payment methods, while in China, mobile platforms like Alipay and WeChat Pay handle billions of transactions each year. Apple Pay’s presence and usage in each major geographic region is outlined below.

• North America: Apple Pay holds over 90% market share in the United States, where it accounted for 48% of all digital wallet payments at physical stores as of 2022. It has benefited from favorable regulations such as EMV chip standards and a well-established contactless infrastructure. Apple Pay is also the leading mobile payment method in Canada, where it has similar regulatory support.

• Europe: Apple Pay is Europe’s second-most-used mobile payment method after Google Pay, though its market share varies by country. European Union directives such as Payment Services Directive (PSD2) regulation, which promotes open banking and contactless payments, have supported Apple Pay’s growth. Other requirements such as Strong Customer Authentication (SCA) have added steps to the transaction process.

• Asia Pacific: Apple Pay is among the most used mobile payment methods in Australia, a market that has shown strong interest in digital payments. In China, however, Apple Pay faces challenges because of the dominance of competitors such as WeChat Pay and Alipay as well as stricter regulations such as the Personal Information Protection Law (PIPL).

• Latin America: In 2023, about 20% of people in Brazil and Mexico used Apple Pay for online or in-store payments. Emerging open banking initiatives such as Brazil’s Pix are reshaping digital payments in this region and influencing Apple Pay’s usage, especially for peer-to-peer transactions.

• Middle East and Africa: Apple Pay’s presence in the Middle East and Africa is in its early stages. The platform has a 15% market share in Morocco and below 5% market share in Egypt and Kenya. In the United Arab Emirates, Apple Pay ranks fourth among mobile payment methods. The service’s future in these regions will depend on the diverse regulatory environments, varying levels of financial inclusion, and digital payment infrastructure.

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 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 include:

Individual users

• Millennial and Gen 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 users

• 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 simplify check-in and payment processes.

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

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:

• Google Pay: Google Pay 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 using Google, Google Pay integrates with Google Play Store, Google Ads, and other services, simplifying the payment process.

• Samsung Pay: Samsung Pay has a robust security system, using its proprietary magnetic secure transmission (MST) technology alongside NFC. It’s compatible with most payment terminals—even older models—and its enhanced security can be valuable for businesses that handle sensitive transactions.

• Additional digital wallets: Many banks and payment providers have digital wallets. These often tightly integrate with banking platforms and financial services, which can create a convenient and familiar experience for customers who already use those services.

• Contactless payment cards: Contactless cards are widely accepted and work at most payment terminals that support contactless payments. This simplifies transactions 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.

• QR code payments: QR code payments eliminate the need for physical contact with payment terminals, which is ideal when 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.

How Stripe can help

Stripe Payments enables businesses to set up and accept 100+ payment methods, including Apple Pay. It provides a unified, global payments solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs and Link, Stripe’s digital wallet.
  
• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.
  
• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.
  
• Improve payments performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.
  
• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% uptime and industry-leading reliability.
  

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.