Apple Pay is finally extending its services beyond the private sector to provide public service as well beginning September after U.S. President Barack Obama approved the service on Friday as a payment method for federal transactions.
The U.S. government currently has Direct Express as its payment vendor and is using debit cards to process more than 87 million transaction worth $26.4 billion per year, according to Bloomberg.
"We're excited to announce that beginning in September, Apple Pay will be available for many transactions with the Federal Government, like, for example, when you pay for admission to your favorite national park," Apple CEO Tim Cook said on stage at the White House summit on cyber security and personal privacy at Stanford University.
"We're also working to make sure credit and procurement cards issued to government employees for their expenses can be used to Apple Pay, and we're working on initiatives with leading banks and networks to use this technology with benefits programs like social security and veteran's pensions that serve citizens at both the state and federal level."
Cook also addressed the issue of national security and consumer information privacy during the event. He clarified that Apple has "a straightforward business model" and personal data is not on its product list.
As the Cupertino-based company continues to bounce back to being a strong company after reports of major profits from last year following the launch of the latest iPhones, receiving a seal of approval from the White House is a booster for its mobile payment service. The company had challenges pushing businesses to accept Apple Pay as a payment method.
"This is really a big deal as it gives Apple access to the millions of federal employees but, more importantly, the billions of Americans who pay federal institutions," analyst Patrick Moorhead of Moor Insights and Strategy wrote in an email to Mercury News.
Aside from Apple Pay, TechCrunch reported that the company will also work closely with the government on digitizing passports, driver's licenses, and other identification.
