Office Depot, Inc. (ODP) became one of the first retailers to start accepting Apple Pay following its launch on Oct 20 across the U.S. Apple Inc’s. (AAPL) Apple Pay is a mobile payment application available on the recently launched iPhone 6 and iPhone 6 plus and soon-to-be launched Apple Watch.
Further, Office Depot plans to integrate Apple Pay into its iOS app in 2015. This will facilitate one-touch payment of in-app purchases on iPhone 6, iPhone 6 Plus, iPad Air 2 and iPad mini 3. The acceptance of Apple Pay will enrich the shopping experience of customers as it makes purchases hassle free and a secure affair.
In addition to Office Depot and Apple stores, Apple pay will be used by over 220,000 retail stores that include Macy’s Inc. (M), Panera Bread Company (PNRA), Aeropostale, Inc. (ARO), American Eagle Outfitters, Inc. (AEO), Bloomingdale’s and Whole Foods Market, Inc. (WFM). Apple Pay expects more retail collaborators going ahead.
Apple Pay does not store credit/debit card data. Instead, after linking a credit/debit card, it generates a unique Device Account Number that is encrypted and safely stored in the 'Secure Element' of the cellular device. Then, while making payments; it generates a one-time password, and does not use the security code mentioned on the card. This makes the whole payment mechanism very secure as no information of the cardholder is stored either with Apple Pay or with the other party.
This seems a very powerful technological advancement, especially in the light of massive security breaches at retailers like Target Corp. (TGT) and Home Depot Inc. (HD). Recently, Staples, Inc. (SPLS) also raised concerns regarding a potential security breach of its database.
However, some experts are of the opinion that it is too early to brand Apple Pay as a completely safe application. They conclude that only a glitch free sustained usage can eliminate the possibilities of kinks in the security. Til then, they maintain a cautious stance.
Nevertheless, with the launch of Apple Pay, Apple seeks to revolutionize mobile payment systems. Moreover, if this app works out it is likely to trigger a war in the mobile payment apps arena as other technological giants, including Google Inc. (GOOGL), are already eyeing this lucrative opportunity.
At present, Office Depot is a Zacks Rank #2 (Buy) stock.
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