During a cybersecurity summit held at the Stanford University recently, Apple chief executive officer Tim Cook announced that Apple Pay will become available for specific transactions with the federal government. Although nothing is certain yet, Cook strongly hinted that Apple's mobile payment system could be used to pay the federal government starting September later this year.
Cook specifically mentioned that Apple Pay will likely be used initially for paying admission for national parks. If this goes well, we may be seeing a lot of people pay for Smithsonian souvenirs or even VISA application fees using Apple's mobile payment system soon after.
September may still be a long way off, but whether Americans will be able to use Apple Pay by that time will depend hugely how many point-of-sale (POS) systems the government can acquire, specifically those that are compatible with near field communications (NFC), an important piece of technology that is crucial to the Apple Pay's system.
In another recent Apple Pay-related news, the White House has confirmed that it is currently working with large financial institutions in the United States in enabling Apple Pay for federal payment cards, especially those used in making payments for Social Security and veteran's benefits.
Everybody knows that Social Security payments usually come via snail mail (post mail) in the form of a check. But two years ago in 2013, a new policy was implemented, requiring benefits to be remitted by electronic means. Recipients of benefits have two options then -- sign up for direct deposit, or get a prepaid debit card (DirectExpress) that gets automatically refilled (this is the preferred option for those who have no bank accounts). If Apple and the federal government can find a way to make Apple Pay work seamlessly with DirectExpress debit cards, pensioners could start paying for McDonald's meals using their Apple devices.
Per the Social Security Administration, more than 55 million US citizens are getting Social Security benefits worth over $71 billion every month. Of course, it is likely Apple Pay will not be able to monopolize all that, but even if it can grab just a small portion of that total, it would still be a win for Apple's mobile operating system.
Moreover, the fact that the federal government is willing to collaborate with Apple signifies that it really is ready to trust in the tech giant's technology. Facilitating payments for retail stores is one thing, but doing the same with Social Security payments is on a whole new level. And it appears that Apple is quite prepared to take on that challenge.
The other question is: will Americans readily embrace Apple Pay in their daily lives too? We will soon find out later this year.
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