Sources tell Bank Innovation that it will probably utilize Apple’s iBeacon program, which is why Apple started selling — and possibly giving away free to select merchants — the iBeacons a while ago. It can also pass richer data than an NFC connection, according to experts who asked to remain anonymous due to the secrecy of the development behind Apple Pay.
Here’s how a source described it back in August 2014:
One way they’ve [Apple] thought up is, say you’re in a Duane Reade, hypothetically. You get a push notification from Pepsi that they’ve worked out a deal with Duane Reade that you can get a free case of Pepsi. Just pick it up and use Apple Pay at the counter.
This is plausible and could be great for bringing consumers and retailers together. It will drive user adoption to Apple Pay while also paving the way for other NFC-based solutions, like Google Wallet. (Sources say that Apple initially pitched a BLE-based solution, but financial institutions shut that down quickly because it wasn’t precise or ubiquitous enough.)
2011: Bluetooth LE = "Bluetooth? That's nothing new."
2012: Passbook = "wtf is this?"
2013: TouchID, iBeacons = "A fingerprint scanner? Whoopty fucking doo."
2014: Apple Pay = “Kinda cool but it won't catch on.”
2015: Apple Pay Loyalty Programs = $$$$$$$ = "Yeah well, Google Wallet was first..."