The internet coverage is pretty spotty for Apple Pay

This is a great piece of information, and explains a lot about how ApplePay works.   It never occurred to me that the card guys would let somebody else store the transaction record.   My assumption now is that transactions are buffered in the iPhone and emptied to the card processor when an internet connection becomes available.    If that is not true, let me know.

This is a neat design, but it doesn’t seem to make a lot of difference in my situation.   What I need is a powerful incentive for local merchants to support ApplePay.  For local merchants, this means convincing them that biometric authentication is going to reduce the fraud chargeback that they are going to achieve with pin-and-card.  Otherwise, they are never going to move past chip-and-card.

For internet merchants, Apple needs to adapt to existing protocols.  Maybe they will be able to eventually move them to ApplePay.  But the gains from Virtual Card Numbers is so enormous that they need to grab it immediately.  The best is truly the mortal enemy of the good in this case.

That is a whole lot more reasonable, I just couldn’t see the card guys letting transactions ride around in an iPhone, though I think that I have read that one “smart-phone”Pay does in fact do this.   In the model you just described, though, the iPhone is just a virtual card that can communicate with NFC,  and one with a biometric authentication system built in.

Which seems to have two advantages.  One, for the user, he can use a virtual wallet and never put his card into a device. And two, he can do a biometric authentication, which arguably is good for both the user and the card gods.

But I question whether the merchants in my area or on the internet have much motivation to support NFC.  They might, it may be very cheap or free when they go to chip card readers, and they ARE (slowly) adapting  to those.   Currently, for brick-and-mortar guys, you have to use signature authentication, the gas guys use your zip code, but internet merchants use nothing.   There is talk about going to PIN on everything.   But PIN’s are hard to remember and easy to hack.   A much more secure thing would be biometric authentication, but not everybody carries a smartphone, much less an iPhone.  Nevertheless, it seems to me that ApplePay might be a good thing at some point in the future, although it’s not very useful now.

However, I’m not convinced that it extends to the internet.  Another approach is to plug the internet hole with virtual card numbers when that is the best you can do.   Apple chose not to do this, but to use biometric authentication on all three.   A more useful approach might be for ApplePay to survey the resources available and adapt its strategy accordingly.   If the website takes ApplePay, use biometrics.  If not, use virtual card numbers.  By doing this, all the websites are open to you, not just the ones that have joined ApplePay.