Apple Pay review: Simplifies payments, improves security

Few people use their phones to pay for goods and services at retail stores. That's because it's not difficult to pull out a plastic credit card, however insecure that technology might be. Apple is trying to change that with Apple Pay, which will come to the new iPhones in October and the upcoming Apple Watch when it's out.

Apple improves over existing systems in a few ways:

- Apple already has your credit card information from iTunes, so setting Apple Pay up with your first credit card is easy. To add additional cards, you can either enter the details or snap a photo.

Apple Pay improves over existing payment systems in a number of ways.

In my brief tests, the phone grabbed my credit card numbers correctly, though I sometimes had to enter my name and expiration date myself because of poor lighting conditions. But grabbing those numbers is a good start, as I'm prone to make typos with 16-digit numbers otherwise.

- Apple uses the phone's fingerprint identification system to authorise purchases. Other wallet apps require passcodes, which can make mobile payments take longer than simply pulling out your credit card.

- Apple stores card information on a secure chip on your device, not on its servers. And it's not even your real card number. Rather, Apple verifies your card information with your bank and then stores an alternative card number.

That way, if a merchant's system gets hacked, only the alternative number is compromised, and that number would require one-time security codes available only with the physical possession of your phone.

- The system works with credit cards issued by a variety of banks, including all three of mine. A payment system called Softcard, formerly known as ISIS, doesn't support any of my three banks. Amazon's Fire phone has a wallet app, too, but it doesn't even do credit cards, which is surprising for a retailer. It works only with gift cards.

Apple Pay's usefulness will be limited until more merchants install the necessarily equipment, but many chains already do and more are coming.