Apple Pay has opened up a whole new world for scammers.
The Guardian reports that some crooks are setting up Apple Pay on their phones with others personal information and then going on costly shopping sprees. Startled by the level of fraud, banks are scrambling to fortify their systems, the newspaper reports.
Apple has touted security as one of the main selling points of its mobile payment system, which lets people with the latest iPhones make purchases by waving their gadgets at the register, rather than swiping their credit cards. Instead of transmitting a user s credit card number, Apple Pay shares a unique token with the retailer. That helps protect Apple Pay users from the massive breaches that have hit stores like Target and Home Depot, where hackers made off with thousands of credit card numbers.
The Apple Pay schemes perpetrated by hackers so far have been a far cry from those breaches, but they still pose problems for Apple as it tries to sell consumers on a new way to make purchases, said James Wester, a research director at IDC.
It still feeds into the perception that mobile payments might not be as secure, he said.
Apple has also talked up the convenience of its system, arguing it is easier for consumers to reach for their iPhones than to fumble for the right credit card. But companies must always strike a balance between security and convenience as many of the best security practices are tedious, Wester said.
When you start making things as easy as possible, that almost by definition means you cant make it as secure as possible, he said. This makes me wonder whether they may have erred on the side of making it too convenient.
A spokesman for Apple stressed to the Guardian that its system for shielding credit card information had not been compromised.
Apple Pay is designed to be extremely secure and protect a user s personal information, the spokesman told the Guardian. During setup Apple Pay requires banks to verify each and every card and the bank then determines and approves whether a card can be added to Apple Pay. Banks are always reviewing and improving their approval process, which varies by bank.
The criminals behind the schemes have focused on Apple Stores as they accept the mobile payment system and sell pricey items, according to the Guardian.
Above: Apple Pay has been abused by hackers (Bryan Thomas/Getty Images).
