What is Apple Pay?

Apple Pay is a mobile payment and digital wallet service developed by Apple Inc. that allows users to make payments in person, in iOS apps, and on the web using their Apple devices.

How does Apple Pay work?

To explain how it works, it makes the most sense to start from the beginning, discuss adding the cards to your Apple Pay account, how to use it at a terminal and then the technology behind it.

Adding Cards: First, you need to add a credit or debit card to your Apple Pay account. To do this, you can open the Wallet app on your iPhone or Apple Watch and tap the plus sign to add a new card (in the upper right). Alternatively, you can add a card through the Settings app by selecting "Wallet & Apple Pay" and then "Add Credit or Debit Card."

Verification: Consider this Step 2 of "Adding Cards". Once you've added your card, you will need to verify it, and usually that's done through a verification code and text messaging process.

Now, before you get too excited, it seems not every card is compatible with Apple Pay or some have more difficulties with the verification process than others.

For instance, I have a Wells Fargo Active Cash card that I can't manage to verify for Apply Pay, even though Wells Fargo's own website shows that it's available to use with the service, but then I have a PenFed card, Amazon Prime Card,  2 American Express Cards and 1 Apple Card that verified seamlessly! Go figure.

Paying: This is my favorite part because it's so easy. All you have to do is hold your phone up to the terminal (NFC contact reader) at locations that allow Apple Pay and it will prompt you to approve the transaction (using touchID or FaceID) and then give you a "DING!" sound when it goes through.

Side note. You get that same ding sound when you pay your Apple Card bill using the wallet as well.

Security: Apple Pay is designed to be extremely secure because when you have millions of people using your platform you can't risk major security issues messing it up. There's literally billions of dollars riding on this.

So, how does Apple keep your card details secure? When you add a card to your account, the original card number is replaced with a unique Device Account Number through a process called tokenization.

This tokenized number is stored securely on your device, and is used to process transactions instead of your actual card number, which is always the ideal solution.

This tokenization model is very important for one huge reason. If you never send your card details to a merchant, or over the air where it could potentially be intercepted, there's nothing that can be stolen!

You might think "Ok, but if you just steal the Device Account Number couldn't you use that and make charges?" Nope. See, you'd also need the original device it was associated with (like your iPhone) and then you'd need to be able to verify transactions (touch or face); so, basically, you'd have to either have your biometric information on that phone, or actually BE that person in order for it to process a transaction.

Cool, huh?

Doesn't it kind of make you feel weird now handing your credit card off to a server at a restaurant to charge? Wouldn't it be so much safer if you could hand them a device account number instead?

More restaurants should really leverage this technology and have a mobile NFC card reader they bring out to the table when it's time to pay the bill. I think that little leather book with your bill that you slip your card into is a little outdated and insecure at this point!

Technology: Under the hood Apple Pay uses a technology called Near Field Communication (NFC) to communicate with the contactless payment terminal. This is a short-range wireless technology that allows your device to send payment information to the terminal.

It's too complex for me to explain it, plus it's probably boring to 99% of the people on this page (including me!), so the link above, combined with your new knowledge of tokenization should cover it completely.

What cards can I add to Apple Pay?

If you read the above section on Verification you'd see that not every card is compatible with Apple Pay, however, most major bank debit cards and credit cards are. It's the verification process that's hit-or-miss.

If you have an American Express, Mastercard or Visa; it should easily work. That applies to Visa or Mastercard debit cards, credit cards and gift cards.

The best resource for seeing which cards are supported is on Apple's own website where they have the entire list.

Where Can I Use Apple Pay? 96 Retail Stores & Restaurants That Take Apple Pay

It made more sense to categorize these by store-type, so while you'll see duplicates as certain stores (such as gas station + convenience) fit into multiple categories, it's a lot cleaner to read.

Convenience Stores

• 7-Eleven
• Circle K
• Chevron
• Chevron ExtraMile

Department Stores

• A Pea in the Pod
• A.C. Moore
• Acme
• Anthropologie
• Bed Bath & Beyond
• Bloomingdale’s
• Brooks Brothers
• Crate and Barrel
• Kohl's
• Lowe's
• Macy's
• Men's Wearhouse

Discount Stores

• 99 Cents Only
• 99 Ranch Market
• Aldi
• Big Lots

Electronics Stores

• Best Buy
• RadioShack
• Office Depot
• Office Max
• Staples

Fashion Stores

• Abercrombie & Fitch
• Aéropostale
• American Eagle Outfitters
• Ashley Stewart
• Athleta
• Banana Republic
• Banana Republic Factory
• Champs Sports
• Claire’s
• Coach
• Cole Haan
• Eddie Bauer
• Express
• Finish Line
• Foot Locker
• Footaction
• Forever 21
• Guess
• Lids
• Nike

Food and Beverage Stores

• Baskin-Robbins
• Dairy Queen
• Dunkin’ Donuts
• Jamba Juice
• KFC
• Pizza Hut
• Raley’s
• Safeway
• Shaw’s
• ShopRite
• Sprouts Farmers Market
• Starbucks
• Subway
• Whole Foods Market

Gas Stations

• 76
• Chevron
• Chevron ExtraMile
• Texaco

Grocery Stores

• BI-LO
• Giant Eagle
• HEB
• Jewel Osco
• Meijer
• Publix
• United Supermarkets
• Winn-Dixie

Home Goods Stores

• Bed Bath & Beyond
• Crate and Barrel
• Lowe's

Jewelry Stores

• Claire’s
• Men’s Wearhouse

Pet Stores

• Petco
• PetSmart
• Unleashed by Petco

Supermarkets

• Acme
• BI-LO
• Giant Eagle
• HEB
• Jewel Osco
• Meijer
• Publix
• Raley’s
• Safeway
• Shaw’s
• ShopRite
• United Supermarkets
• Winn-Dixie

Toy Stores

• Toys R Us

Vending Machines

• Coca-Cola Vending Machines

Fast Food Restaurants

• Dairy Queen
• Dunkin’ Donuts
• KFC
• McDonald’s
• Pizza Hut
• Subway

Ice Cream Shops

• Baskin-Robbins
• Dairy Queen

Sporting Goods Stores

• Bass Pro Shops
• Eastern Mountain Sports
• Sports Authority

Bakeries/Cafes

• Baskin-Robbins
• Dunkin’ Donuts
• Panera Bread
• Starbucks

Pharmacies

• CVS
• Duane Reade
• Walgreens

Card and Gift Stores

• Hallmark

Women's Clothing Stores

• A Pea in the Pod
• Ashley Stewart
• Athleta
• Anthropologie
• Banana Republic
• Banana Republic Factory
• Fabletics

Outlet Stores

• Bloomingdale’s Outlet

Superstores

• Meijer

Other Common Questions

A lot of people have already figured out how to use Apple Pay and add cards, so the next set of questions really center around which stores have the NFC card terminals to accept Apple Pay.

While there was no way I could make a definitive list (as seen above, with 96 stores) there are a few missing major retail stores that don't take Apple Pay, and some that are asked so many times I may as well create a section for it!

Does Target take Apple Pay?
Yep! Target accepts Apple Pay. You can even use your Target card.

Does Costco take Apple Pay?
Yes! Costco accepts Apple Pay and it's super easy to use. Just tell the cashier that you want to use it and they'll help you.

Does McDonald's take Apple Pay?
Yes, McDonald's accepts Apple Pay. Just don't forget to tell them you want to pay that way. Oh, and also don't be surprised if the card reader cord is too short and you have to hand them your phone LOL! (Wait, maybe that's just Carl's Jr)

Does Walmart accept Apple Pay?
Nope. Walmart being Walmart as usual. Maybe they're trying to create their own version called WallyPay or something silly. 10/10 it would have a yellow smiley face if they did.

Does Taco Bell take Apple Pay?
Yep, Taco Bell accepts Apple Pay. I use it all the time there.

Does Chick-fil-A take Apple Pay?
Chick-fil-A definitely accepts Apple Pay.

Does Kroger take Apple Pay?
Sadly, no, Kroger doesn't currently accept Apple Pay. Though, Safeway, Von's, .etc, do.

Does Home Depot take Apple Pay?
No, Home Depot isn't accepting Apple Pay and neither is their biggest competitor Lowe's. What's a person gotta do to get some lumber on their iPhone around here?!

Does Walgreens take Apple Pay?
Yep, you can NFC-Ping away at Walgreens!

Does Starbucks take Apple Pay?
Of course! Starbucks has accepted Apple Pay for years and I can't think of a better way to spend an average of $6/day than by waving my phone by the reader.

Does CVS take Apple Pay?
Yes, CVS has NFC card readers and can accept Apple Pay.

Does Chipotle take Apple Pay?
Heck Ya! Chipotle definitely lets you pay with Apple Pay. After all, why limit the amount of burritos you can sell? Exactly.

How Much Do NFC Terminals Cost?

Finally, I wanted to add this section because the inevitable question after finding out your favorite store doesn't accept Apple Pay or offer Tap-To-Pay of any kind is "Are NFC card readers too expensive?"

Quite honestly, no, they aren't. At least not on an individual basis. The average price of a Point-of-sale (POS) NFC terminal is about $150. Which is perfectly acceptable if you have one location and 1 or 2 card readers.

Unfortunately, those costs really start to add up if you're Walmart.

The average Walmart has about 14 checkout lanes + 6 self-checkout terminals, though at some stores there are two 6-station self-checkout areas + 14 - 16 checkout lanes.

Let's just call it an even 20 terminals to make this easier.

At 20 terminals, the total cost to add new NFC readers would be somewhere in the range of $3,000 (not including installation and potential software changes)

Now, multiply $3,000 x 10,500 Walmart stores and you start to get a better picture of the total cost: $31,500,000.

Home Depot, similar story.

Factor about 12 terminals (including self-checkout) and multiply that by 2,300 stores and you've got a total cost of $6,900,000.

That's just a rough ballpark and it doesn't include the fact that you already have perfectly good non-NFC card readers in place, it costs money to install, you have to get rid of the old readers that you're likely still paying for and you may need new software.

Imagine if the existing card readers cost Walmart $20m - $30m to purchase, another few million to install, and then a year or 2 later they're forced to upgrade to NFC readers to accept Apple Pay.

That starts to get really expensive and you have to determine if a change is going to help or hurt your business at that point.

So, when you wonder why these bigger stores don't accept Apple Pay, the reality is they would probably love to offer that option, it just isn't financially feasible at this point when factoring in the total cost of the terminals they already have, replacing them at a higher cost and then installation.