Will new Apple Pay 'change the way you pay'?

Apple has today announced Apple Pay, a new category of service that aims to "transform mobile payments" with an easy, secure and private way to pay.

Apple Pay works with iPhone 6 and iPhone 6 Plus through NFC antenna design, a chip called the Secure Element, and the security of Touch ID.

The service will also work with the newly announced Apple Watch, extending Apple Pay to over 200 million owners of iPhone 5, iPhone 5c and iPhone 5s worldwide.

“Security and privacy is at the core of Apple Pay," adds Eddy Cue, Apple’s senior vice president of Internet Software and Services.

"When you’re using Apple Pay in a store, restaurant or other merchant, cashiers will no longer see your name, credit card number or security code, helping to reduce the potential for fraud.

"Apple doesn’t collect your purchase history, so we don’t know what you bought, where you bought it or how much you paid for it.

"And if your iPhone is lost or stolen, you can use Find My iPhone to quickly suspend payments from that device.”

Apple Pay supports credit and debit cards from the three major payment networks, American Express, MasterCard and Visa, issued by the most popular banks including Bank of America, Capital One Bank, Chase, Citi and Wells Fargo, representing 83 percent of credit card purchase volume in the US.

Cue believes Apple Pay will "change the way you pay." When you add a credit or debit card with Apple Pay, the actual card numbers are not stored on the device nor on Apple servers.

Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element on your iPhone or Apple Watch.

Each transaction is authorised with a one-time unique number using your Device Account Number and instead of using the security code from the back of your card, Apple Pay creates a dynamic security code to securely validate each transaction.

“JPMorgan Chase has been pleased to collaborate on Apple Pay to create a better, faster and safer payments system, which puts the customer first, creating an exceptional customer experience for consumers and merchants. Everyone wins,” adds. Jamie Dimon, chairman and CEO, JPMorgan Chase & Co.

Starting in October, with iPhone 6 and iPhone 6 Plus, Apple Pay will be available in the US as a free update to iOS 8 and will work in stores with iPhone 6, iPhone 6 Plus and Apple Watch.