ApplePay took many people by surprise, likely including Square. NFC has been around for quite a while, but has been considered a "dead end" by many people since it never really took off. Many people in the technology world assumed some form of mobile payments would trump physical payment cards (including NFC/Wireless EMV), and NFC based phone wallets (G... (more) It happens over the phone's Internet connection, not over NFC.
When a user adds a card to Passbook, Apple sends the card details (card number) to a remote service over wifi/3g and gets the token back in return. This token, which is persistent (not one use), is stored in the secure element.
When the user goes to make a payment, the phone interacts over... (more)
This question is asking us to extrapolate on rumors for "ApplePay 2.0," which hasn't been released or announced yet by Apple. Given ApplePay was just announced in Sept 2014, I'm not even sure Apple knows what will be in ApplePay 2.0, as they are probably experimenting internally with many technologies to further their payment product, some of which may be... (more)