“When Apple was planning its Apple Pay electronic payment system last summer for its iPhones, the nation’s banks raced to be included among the first credit card issuers associated with the new technology,” Andrew Ross Sorkin reports for The New York Times.
“Six months later, some of the nation’s banks are privately complaining that Apple Pay may not be so great after all. But the banks may largely have themselves to blame,” Sorkin reports. “Apple Pay itself should, in theory, cut down on fraud because it makes stealing credit card information almost impossible. Each time a transaction takes place, Apple generates the equivalent of a new credit card number so the merchant never actually sees a customer’s information.”
“The banks, desperate to become their customers’ default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn’t speak up. The banks didn’t press the company for fear that they would not be included among the initial issuers on Apple Pay,” Sorkin reports. “It also appears that banks set up a flawed process to deal with the credit cards that it did flag. Affected users were directed to a customer care phone center, not a fraud prevention center. A customer care center’s mission is to help customers use their cards, leading more fraudulent cards to be approved for use on Apple Pay.”
Read more in the full article here.
MacDailyNews Take: Again, Apple Pay is secure, it’s the initial verification process that the banks need to tighten up.
[Thanks to MacDailyNews Reader “Mark” for the heads up.]
Banks respond to fraud, toughen up Apple Pay credit card verification – March 7, 2015
Banks, retailers ‘stung’ by fraud, Apple Pay still perfectly secure – March 6, 2015