Apple Inc.'s (AAPL) Apple Pay will launch this week in the U.S. both online and in 220,000 stores across the country. iPhone 6 and iPhone 6 Plus users will be able to pay at the verified retailers through their phone, using NFC contactless payment and Touch ID for verification.

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This is only the start for Apple Pay, but the first few months might decide whether the payment service is accepted into the U.S., similar to Google, Amazon and PayPal's mobile payment services.

Apple does have some advantages against other competitors, especially online. In stores, Apple Pay is accepted by 80 percent of large banks, and McDonalds, Macy's and Staples are all preparing to add Apple Pay services this week.

For retailers that do not want to offer contactless payment, Apple Pay can also work on mobile apps. Starbucks will use their app, in order for users to pay for coffees with their phone. A few other providers will use this cheaper route.

The online side of Apple Pay will be interesting, with the payment service having a large advantage on iOS. Only Apple Pay can utilize payments inside the app with one click, kicking out competitors like PayPal, who cannot create APIs for iOS.

Walmart (WMT) and Best Buy (BBY), two of the biggest retailers in the U.S., have both said they will not back Apple Pay. Instead, the two retailers will be using CurrentC for mobile payments. Others like KFC, Pizza Hut and H&M have said they're looking into Apple Pay, but currently have no plans to add the service into stores.

Apple Pay works on a token-based system, the user will use their fingerprint to verify the payment. This makes it a much more secure system as the cashier does not see your personal information. It is also a lot quicker, according to Apple CEO Tim Cook, who showed the tech off at Apple's event in Flint Center, Cupertino on September 9.

Tagspayment services, NFC, contactless payment, mobile payments