Apple Pay is a mobile payment system that allows users to make contactless payments through compatible iOS devices. It is based on NFC (Near Field Communication) technology that enables devices to establish communication when they are brought within close proximity of each other. This technology has been present in smartphones and in other contactless payment systems for a number of years, so Apple Pay can be seamlessly integrated and works with existing infrastructure. Through this service, Apple promises simplicity and more secure transactions.
There are 2 different options to enter a credit or debit card into Apple Pay. One option is to use a card currently linked to the pre existing Apple account where the only step needed is to verify the credit card number and security code.
The other option is to enter a new credit or debit card to the device by either entering the information manually or taking a photo of the card. If the user chooses to take photos of his or her card, the photos are encrypted during transfer to Apple’s server and not saved anywhere after they are used to activate Apple Pay.
There are many concerns that arise when the topic of mobile payment arise. Questions such as, “How safe am I?” or “Will other people be able to steal my personal information?“ are discussed people are inputting their data onto the internet. Apple’s security technology, “Touch ID”, removes the need for signatures during payment. Instead, Apple Pay utilizes Touch ID to read fingerprints that are placed onto the home button of the phone. This enables the device to scan and properly identify if it is the correct owner of the credit card.
When making transactions, Apple Pay utilizes tokens, a randomly generated 16-digit number that resembles a valid credit card, but only acts as a placeholder for the user’s actual information. The token is sent to the merchant where the token is also sent to the credit card network to request authorization from the bank for the transaction. During this process, because the token is not generated through an encryption process, it cannot be decrypted thus there is no “master key” unlock it, therefore they are useless even to the best hackers, allowing for a extremely secure transaction.
During the setup and authentication process of a new card, security features such as encryption are used to exchange personal information between its platforms. Through each destination, the data is decrypted and then re-encrypted before being sent again. In order to approve a person’s card, Apple’s system collects data from iTunes, the App Store, device information and the location of where the card was added and sends this encrypted information to the user’s bank for evaluation. When the card is approved, the bank creates an encrypted device-specific Device Account Number and other data such as the key to generate the dynamic security codes unique to each transaction. Afterwards, the data used during the authentication process is never stored on Apple’s servers.
In a worst case scenario, when a user loses his or her device that contains important personal information on Apple Pay, the user can use Find My iPhone to remotely cancel, suspend or permanently remove credit card information. Thus, the security of Apple claims that Apple Pay covers security flaws that may allow users’ personal information to be stolen.
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https://www.apple.com/apple-pay/
