Apple Inc. (NASDAQ:AAPL) introduced a new digital payment service called Apple Pay during its product launch event on Tuesday, September 9.

iphone 6 NFC Apple Pay

According to the Cupertino-based tech giant, Apple Pay is connected to its new iPhone 6 and iPhone 6 Plus, which allow users to purchase products and services using their devices.  Apple is offering the iPhone 6 with 4.7-inch display 16GB model for $199 while the iPhone 6 Plus with 5.5 inch display 16GB model for $299 a contract.

Apple hopes to accelerate checkout process

Apple hope that Apple Pay would help accelerate the checkout process and make credit payments more secure. The iPhone maker also aims to eventually replace physical wallets.

The Cupertino-based iPhone maker said Apple Pay is powered by Near Field Communication (NFC) technology, which transmits a radio signal between the device and a receiver when the two are fractions of an inch apart.

Market observers consider the mobile payment sector as a flourishing business and Apple wants to get a piece of it. In the United States, consumers widely use their credit cards for purchases, which provide mobile payment service providers with endless revenue stream.

Kevin Talbot, a managing partner at Relay Ventures commented, “The magnetic stripe works well, and it’s universal, and everyone’s got it. The question for Apple is if they can take the complexity out of paying with a smartphone, to make it as easy as using a credit card is today.”

Apple encrypts every transaction on Apple Pay

According to Apple every transaction on Apple Pay will be encrypted to ensure security. The company said Apple Pay will be known as a new payment service because it can to store different credit cards from American Express Company (NYSE:AXP), MasterCard Inc (NYSE:MA) and Visa Inc (NYSE:V).

Apple also emphasized that consumers will be able to use Apple Pay in different stores (220,000 merchants) such as Macy’s Inc (NYSE:M) and McDonald’s Corporation (NYSE:MCD) among others.