Apple to deploy tokenization + NFC for secure mobile payments, sources say

“Apple will be utilizing near field communication (NFC) technology and tokenization technology in the new iPhone 6 and iWatch as a part of its payments initiative, according to sources close to Apple and with knowledge of Apple’s plans for its new smartphone,” Ian Kar reports for Bank Innovation. “In addition, Bank Innovation has uncovered Apple patents dating back to 2009 related to the tokenization process, confirming the company’s long-standing interest in tokenization.”

“Apple stores already support NFC. This was confirmed by a test in a store and by sources, who told us that the Apple Stores and Apple retail partners are using the Verifone MX 915 terminal for their point-of-sale terminals (not to be mistaken with mobile point-of-sale terminals),” Kat reports. “Many are familiar with NFC technology, but tokenization may be a different story. Financial institutions — card issuers and networks — prefer token technology because it replaces primary account numbers, those 16-digit card numbers on the front of credit and debit cards. Instead, the tokenization technology uses complex codes that are easily transmittable over the air and between devices, but that are used only once, so even if they are intercepted, are of no use to fraudsters.”

“Apple’s interest in the use of NFC technology and tokenization — and using the combination both – has broad, long-term potential with valuable use cases. Apple can potentially use tokenization technology and apply it to ‘real-life applications, as well as like transit, building access, and hotel keys,’ said James Wester, global head of payments at IDC Research,” Kat reports. “And knowing Apple, even beyond those.”

Read more in the full article here.

MacDailyNews Take: A little birdie tells us that “for many reasons, everyone is going to want Apple’s wearable on their wrist.”

In just two of its myriad functions, Apple’s wearable device will let users seamlessly pay at convenience stores, grocery stores, sporting events, concerts, shopping malls, gas stations, and restaurants while also serving as keys for their vehicles, hotels, residences, and more.

[Thanks to MacDailyNews Readers “Lynn Weiler,” Dan K.,” and “Arline M.” for the heads up.]

Related articles:
Alleged leak of Apple ‘iWatch’ component drawings and specs surface online – September 8, 2014


  1. Tokenization is the same security that current NFC enabled PayPass (and similar) cards use. And actually makes these cards more secure than the mag strip on most credit cards. This is why the constant screams that NFC payments are insecure are so ridiculous.

    Tokenization basically creates a different authorization number every time you use a contactless payment system. If a hacker were able to grab the number, they’d get 1 chance to use it, before the numbers were changed again (after they used it, or if you use that card again before they get a chance to try the number they skimmed).

    Most hackers steal a card number, use it once for something small (a bottle of soda, a pack of gum, etc.) then they hit the stolen number for something big once they know it works. Say a hacker skims my NFC payment authorization at a store – if they take a chance to run a $5000 item on that number that doesn’t get approved, they don’t get a second chance to go for a lower amount, the token then changes again and only the chip on my card can generate that new number.

    If all this NFC and payment talk is true – Apple is doing the right thing by using a system that is already in place (tokenization) and hopefully adding another layer of security by requiring a thumb print authorization as well.

    They’d really hit out of the park if they also figure out a way to include online payments in the tokenization so you wouldn’t need to worry about storing numbers on websites any longer!

  2. I can only imagine how many attention-craving tech news reporters and tech industry pundits will be calling the Apple wearable device the New iFlop. It has to be that way. There are so many out there that absolutely hate Apple’s success and they’ll try to undermine it any way they can. I’m fully prepared for the imminent Apple share price sell-off which has already started. Apple has boldly stuck its neck out on the chopping block and there will be many who want to get the first swing with the axe.

    1. How right you are. I’m certain the usual suspects have already written 90% of their copy for release after tomorrow’s announcements. At least we know what to expect.

      1. You’ve got it there, Arnold. In fact, “sources familiar with the matter” have leaked some of that ready-to-go copy to me.

        “The new Apple __________ will be a flop. Compared to the Samsung __________, it really offers nothing new. In addition, the _________, ________, _________ have already brought these abilities to the marketplace.”
        And so on.

  3. It’s rather amusing looking at all those iWatch rivals that were rushed to market based on the rumours before Apple made an announcement. They contain all sorts of biometric sensors, but don’t appear to offer the electronic transaction system which is what’s really going to be the game changer.

  4. I believe MDNs take is right indeed it’s been mt take since Christmas when it suddenly clicked. People still do t get it, many claim they would not have need for a Watch even when you tell them the last thing it will be is a watch but most of those will change their mind starting from tomorrow. Remember Apple devices are about the platform it plugs into and clearly it will be extensive in this case and when you no longer have to go searching for all those miscellaneous cards, keys, wallets, passes, coinage and whatever to live your normal life that’s when people will really get it, indeed wonder how they did without it.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.