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Apple Pay™ and Sync Payments

Sync and Apple Pay

Apple Pay™ and Sync Payments

What you need to know

Apple® announced the launch of Apple Pay and it created quite the buzz. Apple Pay news is being covered across national and local media outlets and is something that will spark the interest of merchants and generate questions. If you have any questions about Apple Pay, please email info@syncpayments.com or contact us at 855-SyncPay (855-796-2729) and we’ll be happy to address them. This information is subject to future revision and is being provided by Sync Payments with no representation or warranty as to its accuracy.

What is Apple Pay?
In short, Apple Pay is Apple’s mobile wallet. It allows consumers with certain iOS devices to store their credit or debit card details securely in digital format and then use the device to make in-store, in-app or eCommerce purchases. Simply put, Apple Pay is designed to replace plastic cards with digital equivalents. When a consumer uses Apple Pay to make a purchase, they will still be paying with their credit or debit card of choice, but instead of using a plastic card, they can complete that purchase using their iOS device.

Who processes Apple Pay payments?
Sync Payments! Apple Pay is another method for a consumer to provide Visa®, MasterCard® and American Express® credit or debit card payment information to a merchant, the payment is still processed by the merchant’s electronic payment processor over the merchant’s existing merchant account. In the eyes of the merchant, not much changes. Those payments appear on the merchant’s monthly statement from their merchant account provider just like any other Visa, MasterCard or American Express payment.

How much does it cost a merchant to accept Apple Pay payments?
Ready for this? The merchant does not have to pay any additional processing fees to accept payments made through Apple Pay! The merchant will pay the same processing fees as they would if the merchant swiped or manually entered a Visa, MasterCard or American Express payment.

Why doesn’t Apple Pay support Discover Network® cards?
It is true that Apple Pay does not support Discover Network. Apple made deals with many Visa, MasterCard and American Express card issuers to treat in-store payments made with Apple Pay as card present (just like the card was swiped or used with EMV). We believe Apple was either not able to come to the same terms with Discover or that Discover was not able to support the same NFC tokenization technology Apple Pay relies on for in-store payments, however we anticipate that will change in the very near future.

What interchange levels will Apple Pay payments qualify for?
Apple Pay in-store payments will be treated as card present while in-app and eCommerce purchases will be treated as card not present.

How does Apple Pay work in a retail environment and is it secured?
For in-store transactions, Apple Pay uses NFC capabilities built into the iPhone 6 and 6+ that will also be included in future releases of iOS devices. When the consumer is ready to complete an in-store payment at a retailer who has an NFC enabled payment system, the consumer simply selects the desired payment account in their Apple Pay application, holds their finger on the TouchID sensor and waives or taps the phone against the merchant’s NFC reader. The iOS device transmits a one-time use payment token to the merchant’s payment system and the merchant’s payment system sends that token to their existing payment processor just like they would if they swiped the card through the payment terminal. Once that payment token reaches Visa, MasterCard or American Express, the respective card brand converts the payment token into a real account number, processes the transaction and sends the response back down to the merchant’s payment processor who transmits it to the merchant. From a merchant’s perspective, the transaction works the same way it would if the merchant had swiped the card using the magnetic stripe reader (except without the actual swipe). Because Apple Pay takes advantage of payment tokenization developed by the card brands specifically for use with NFC readers, it is a highly secure form of payment since the cardholder’s actual account number is never transmitted and the token can only be used for a one-time purchase.

How does Apple Pay work in an eCommerce or in-app environment and is it secured?
Each merchant who accepts Apple Pay in an eCommerce website or for in-app purchases must submit a certificate signing request (CSR) to Apple. The CSR is typically generated through the merchant’s payment processor. Apple uses that CSR to generate a unique private encryption key for the merchant. That encryption key is downloaded and stored by the merchant’s payment processor. That key is used to encrypt cardholder data being transmitted from Apple Pay’s cloud service, through the cardholder’s iOS device to the merchant’s eCommerce site or mobile application. The merchant’s eCommerce or mobile application sends the encrypted payment data to their payment processor who decrypts the transaction using the encryption key assigned to the merchant. The transaction is then processed like any other transaction. The security of the transaction is very similar to the use of point-to-point encryption technology since the sensitive cardholder data is encrypted before it ever leaves Apple’s cloud system and is only decrypted once it reaches the payment processor (in the most widely deployed scenario). In addition, since the cardholder is required to use Apple’s TouchID service which is a biometric authentication function built into newer models of iOS devices, it would be very difficult for a fraudster to steal an iPhone and use it to make fraudulent purchases.

How does a merchant obtain a CSR and submit it to Apple?
Sync Payments is working with our vendors and we will assist merchants in completing this process. Please contact us directly for more information: info@syncpayments.com or 855-SyncPay (855-796-2729).

What does a merchant need to accept Apple Pay for in-store payments and is it secure?
A merchant needs an NFC capable device that can read the Apple Pay format and is certified to communicate with an upstream payment provider. The good news is most NFC enabled terminals today can support Apple Pay without further modification from the terminal manufacturer. That means many merchants already have Apple Pay acceptance capability.

Is Sync Payments setup to support Apple Pay for merchants?
YES! Apple Pay will be available to consumers in October 2014. Sync Payments’ clients who have NFC enabled payment terminals will be able to process in-store Apple Pay transactions immediately. Clients needing NFC enabled payment terminals can obtain one by calling us: info@syncpayments.com or 855-SyncPay (855-796-2729).
Sync Payments may also support Apple Pay for eCommerce and in-app purchases. Stay tuned for more information on these exciting opportunities!

Is Apple Pay compatible with all Visa, MasterCard and American Express cards?
Consumers wishing to make in-store payments can only use cards that are issued by financial institutions who have explicitly agreed to participate in Apple Pay. Today some of the largest card issuers like Chase, Citi, Bank of America, Wells Fargo, Capital One and American Express have signed on to support Apple Pay. Apple is aggressively working on partnerships with other card issuers as well. We anticipate Apple Pay will reach critical mass in the very near future where just about all card issuers will sign on to support it.

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