The concept is simple. You link a credit or debit card to your iPhone or Apple Watch and wave your device in front of a special processor at participating retailers -- and there are a lot, from Bloomingdales to Whole Foods, with more on the way. The purchase amount is deducted from your card via a special embedded chip. And in theory, it’s hugely convenient, especially for the smartphone addicts among us who’d prefer to ditch the leather Costanza wallet in our back pockets.
But should you feel 100% safe and secure bounding around with a phone that contains all the info a scammer needs to empty your bank account? Apple says absolutely. And in their defense, the system is designed with a series of safeguards.
For one, rather than pass your account information directly to McDonald's or Macy’s from your phone, each transaction is parlayed via a different proxy account, so that your information is never collected or even seen by the merchant -- protecting you from the sort of nightmarish mass-hacking incidents that've hit Target, TJ Maxx, Home Depot and others in recent years.