“Counterfeiting of bank-issued credit and debit cards is likely to fall precipitously during the next few years in the U.S.,” Gail Bronson reports for TheStreet.
“By next October, most bank card issuers will have swapped out their payment cards for new ones that carry embedded microprocessor chips. The chips work to curtail card fraudsters’ attempts to steal information during in-store transactions on point-of-sale terminals,” Bronson reports. “Meanwhile, Apple recently released its own technology platform for mobile payments, called Apple Pay, which enables iPhone 6 customers to use their devices to make secure, electronic transactions with many bank-issued cards.”
“Apple Pay facilitates secure transactions through the use of tokens issued by the banks. These are short pieces of encrypted software code, which contain all the data required to complete a transaction, similar to the data held in mag stripes and chip-embedded cards. The actual customer data remain with the banks that issued the cards. When a customer makes a purchase using his iPhone 6, a software token is sent to the card issuer who decrypts the transaction data for review. So neither Apple nor the retailer ever sees any customer information,” Bronson reports. “‘In my opinion, Apple Pay is as secure as or more secure than a chip card because it uses a biometric, your fingerprint, to authenticate the transaction, instead of a PIN or a signature,’ said Thad Peterson, a senior analyst at Aite Group, a business technology and financial-services research firm. ‘And if you lose your device and activate Apple’s ‘Find my iPhone’ app, it shuts Apple Pay down immediately. So there is virtually no risk of a customer losing his data or having it stolen.'”
Read more in the full article here.