When Apple Pay officially launched earlier this week with the release of iOS 8.1, many rushed to local participating retailers to be among the first to use their iPhone 6 or iPhone 6 Plus as a mobile wallet. Early reviews peg it as easy to use and incredibly convenient. Despite worries about someone stealing your phone or it being susceptible to hackers, experts say Apple Pay actually adds significant security to your payment transactions, even more than traditional credit cards. To start, Apple Pay uses near-field communication (NFC) technology to allow iPhone 6 and 6 Plus owners to pay for items by holding their phones in front of payment terminals. It uses a variety of security measures to protect your payment data, such as tokenization (more on that in a minute), authentication via fingerprint and a secure method for storing the data. Token payments:- Instead of transferring your credit-card information with each transaction, Apple Pay uses a stand-in token thats exchanged between your iOS device and the point-of-sale terminal. Its essentially a surrogate for the actual number. Think of it as your iOS device sharing a code word with the payment terminal. That way, even if someone happens to listen in on that word, its useless on its own. It wouldnt matter if they write it on a billboard, said Andrew Sudbury, co-founder of Abine, a company that designs tools to protect online privacy. The token works with another security measure called a cryptogram, a number generated specifically for the transaction. The cryptogram uniquely identifies your device to make sure the transaction isnt fraudulent. Apple is far from the first company to use token payments — security experts have been pushing for a widespread adoption of token payments for years, Sudbury said. Touch ID:- Other mobile payment platforms, like Google Wallet, use token-like systems too, but Apple Pay transactions work with the iPhones Touch ID fingerprint sensors to authenticate purchases. In order to complete a transaction, users need to put their fingerprint on the devices sensor to verify they are who they say they are. James Anderson, MasterCards senior vice president for mobile product development, told Mashable that those three elements are supposed to work together: the token number, the cryptogram and your fingerprint. Your fingerprint acts as the go-ahead for the other two elements. MasterCard is one of the early adopters of Apple Pay and is making it easy for customers to understand how it works and know where to find retailers nearby that accept the payment option. It recently launched an app called MasterCard Nearby that addresses those questions. It should be noted that its possible to use Apple Pay with a backup code in lieu of Touch ID, though the fingerprint function is considered an integral part of the platform. You cant set up Apple Pay without using it. Although its possible to lift someone elses fingerprint, stealing fingerprints is a time-consuming process and harder than it seems. But Sudbury, of Abine, thinks fingerprints are an overestimated protection, and Touch ID shouldnt be seen as an impenetrable security measure. Unlike a password or PIN, you cannot change your fingerprint, Sudbury said. If someone lifts your print, they have that access for good. He said its dangerous to rely on fingerprints as real security. Secure element for information storage All sensitive material — like your devices unique account number and your fingerprint — are stored on whats called a secure element, a segregated portion of your phone that isnt part of the iOS system. It cant be easily accessed, so it shouldnt be vulnerable to hacking. Its along the same lines as the chip found in EMV cards, but Satnam Narang, a senior security response manager at Symantec, called it definitely unparalleled in its security. You dont even actually store your credit card number on the smartphone. By contrast, Google Wallet houses its secure element virtually in the cloud. PayPal and Softcard (which is backed by wireless carriers) also use the secure element on devices, but only Apple has a complete hold on the hardware and software in its mobile payment ecosystem, a potentially decisive advantage.
Posted on: Tue, 28 Oct 2014 05:44:38 +0000
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