Checkout Choices: Apple Pay and the CE Retailer
All merchants will be upgrading to EMV capability by October 2015, at which time the card networks have mandated a shift in fraud liability from the card issuers (who currently take responsibility for fraud) to the merchants (who currently do not) in any fraudulent transaction where the merchant has not deployed EMV but the issuer has. So the incentive to upgrade is strong – and the addition of NFC capabilities provides added value. Talk to your payments provider about the most cost effective terminals for upgrade, ensuring they have the features that meet your customers’ needs.
Is Apple Pay More Secure?
One of the most important features of Apple Pay is tokenization. A payments token replaces the transmission of the primary account number (PAN) with a token that represents that account number. Why is this important? As recent data breaches at Target, Home Depot and other retailers have shown, thieves are looking for payment account information stored on retailers’ systems. With a tokenized payments transmission, the retailer never sees an actual account number – and so if that retailer is breached, there is no value to the stolen tokens. This reduces or eliminates any value in cybercriminals targeting a tokenized retailer. Of course, tokens can be used in the plastic card transaction world as well – but Apple Pay makes it mandatory for all transactions.
Not only does the iPhone 6 store a token (called a device ID) in lieu of the PAN, it also generates a unique token for each payments transaction, which ensures that no card number is transmitted across the payments systems.