Apple Pay Could Be a Credit Card Security Game Changer

By Wayne Rash  |  Posted 2014-09-09 Print this article Print
Apple Pay

The news about Apple Pay is that it's hitting the market just as merchants are in the process of upgrading their point of sale terminals to accept cards with EMV chips. Virtually every EMV enabled terminal is also able to handle NFC, which means that both payment systems can be enabled at the same time.

"From an acceptance perspective, the timing is really good for merchants," said Randy Vanderhoof, executive director of the Smart Card Alliance, the group that's coordinating the move to EMV chip-equipped credit cards. "Many are already looking to install new POS terminals to accept EMV chip cards, so they can also look at enabling NFC acceptance at the same time. Both features are available on most POS terminals shipped today."

Vanderhoof noted that while consumers have previously shown support for NFC payments, restrictions on which payment card could be used slowed adoption of wireless payments. "No one can change consumer behavior like Apple," Vanderhoof said in a prepared statement. "This move will make the market for mobile payment explode. And it is a great endorsement of NFC technology as the best way to secure mobile payments."

"This could be the turning point for NFC that will make it a commonplace technology," Vanderhoof said.

Right now, five of the biggest U.S. banks will be working with Apple Pay when it's rolled out. They include Capital One, Bank of America, Chase, Citibank and Wells Fargo. A number of smaller banks will be joining Apple Pay in the near future.

Most stores that accept contact-less payment cards will be able to accept Apple Pay, with some major retailers stepping up immediately, including Macy's and McDonalds. Unfortunately, Dunkin Donuts isn't on the list yet, meaning I'll have to keep paying cash for my coffee.

There are, of course, some concerns. The first is whether Apple can be successful at keeping hackers out of Apple Pay. Once it takes off, Apple Pay is going to be a high-profile, high-value target. Fortunately, Apple has managed to find ways to keep snoops out of its iOS devices, including being able to (some say) block the NSA. But whether Apple can block the hackers remains a question.

The second is whether Apple Pay will be available in some way so that other vendors can use the network. While it's unlikely that Apple will be willing to provide critical information to Android or Windows app designers, the fact is that payment card security is everyone's problem, and it is important that Apple not prevent other devices from using such security.

Perhaps if Apple Pay or something like it takes hold, stories like the Home Depot or Target breaches won't keep happening.


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