American Express card holders are expected to be among the first locals to use Apple Pay in Canada and Australia, when they start to make purchases at eligible stores, using an iPhone, Apple Watch or iPad. The two companies said they expected the contactless system to be operating later this year, and in Spain, Singapore and Hong Kong in 2016.As with other similar mobile phone based contactless card payment systems, the card numbers are not stored on the device. Instead, a unique "device account number" is assigned, encrypted and securely stored in the secure element on the Apple device. Each transaction is authorised with a one-time security code. The deal done with Amex has allowed Apple to display a neat sidestep, moving from dealing with Australia's unhelpful major banks. According to a report in the AFR in August, Australian major banks were reluctant to deal with Apple for several reasons: the share of interchange fees being sought by Apple - said to be 15 cents per $100 - was seen as too high, given the Reserve Bank was pushing for these fees to be reduced from 50 cents per $100 to 30 cents; CBA boss Ian Narev pointed out contactless payments via mobile phones running Android systems has been available in Australia for up to two years for CBA and Westpac customers; Tap and go itself has been used in Australia for quite some time, whereas in the US it was a new experience for shoppers when Apple Pay was launched; Take up of mobile phone based contactless payments has been slow so far, though, as most customers prefer to pay with their cards, which don't get flat batteries.The proof of the concept will therefore be well tested in coming months, once the system is launched and end-of-year shopping begins in earnest.