Apple Pay will go live Monday; new iPads support online payments

Apple’s new smartphone payment service, Apple Pay, will go live on Monday, allowing iPhone 6 and 6 Plus users to make credit or debit card transactions at 220,000 check-out terminals around the country with a wave of the handset. But Apple Pay won’t just be confined to the new iPhones and forthcoming Apple Watch. The iPad Air 2 and iPad Mini 3 announced on Thursday will be able to make online transactions linked to Apple Pay, though they won’t be able to make in-store payments.

At Thursday’s event (see our live blog here), [company]Apple[/company] provided a brief update on Apple Pay’s status, announcing its launch date and that 500 more banks have signed up. The support of card-issuers is crucial to the payment platform’s success since it means consumers will be able to plug the cards they already have into Apple Pay instead of working with specific banking partners.

Apple Pay won’t just work at the physical point of sale, though. The payments system can be used to buy goods and services on the mobile phone screen and now the iPad as well. The iPad Air 2 and iPad Mini 3 will have Touch ID for authentication purposes, which will be used to trigger an Apple Pay payment on a website or in an app. The new iPads don’t contain near-field communications (NFC) chips, though, so they can’t be used for contactless payments.

The country’s largest bank, [company]Chase[/company], said Thursday that its Visa credit and debit cards will all be eligible for Apple Pay. Customers will just need to transfer them over from their iTunes accounts or scan their card details directly into Passbook.

The card that winds up in Apple Pay, however, won’t carry the same digits as its plastic counterpart. Once a debit or credit card is transferred to Apple Pay, Chase and other banks will substitute a unique account number in a kind of digital safe known as a secure element, and any transaction made with that virtual card will be verified by one-time security that changes every time it’s used. Combined with Touch ID’s authentication features, these anti-fraud features are one of the key reasons the financial community has embraced Apple Pay.

Apple Pay will be enabled in the iPhone 6 and iPhone 6 Plus with a software update to iOS 8 going out on Monday, essentially turning on the NFC chips inside the phones. Once they load their first credit or debit cards into their phones, consumers will be able to make contactless payments at retail locations across the country, from [company]Walgreens[/company] pharmacies and [company]Whole Foods[/company] grocery stores to [company]Chevron[/company] and [company]Texaco[/company] gas stations, and of course at any Apple Store.

Customers who buy the iPad Air 2 or iPad Mini 3 will get Apple Pay right out of the box for online purchases in apps like HotelTonight, Houzz, Instacart, Lyft, [company]OpenTable[/company], [company]Staples[/company], [company]Target[/company] and Uber. While the iPhone 5s actually has TouchID and will get the iOS 8 update, it doesn’t look like as if it will support Apple Pay for online payments.

This post was updated multiple times on Thursday with more details and background.