It’s been widely reported that Apple Pay has experienced fraud attempts. While fraudulent activity is likely to (at some point) strike any new payment technology, it’s important to understand the nature of fraud related to Apple Pay, as well as best practices that can be employed to prevent it.
The fraud associated with Apple Pay is not related to the technology or the transaction, but rather to the provisioning. Apple Pay as a form of payment is very secure because it utilizes tokenization, a technology by which card account data is replaced with secure digital tokens.
However, fraudsters are opportunists. As such, these criminals caught on to a loophole in the Apple Pay verification process used during credit card enrollment. The fraud is being carried out as fraudsters set up iPhone 6s with stolen payment card credentials. The fraudsters then contact the financial institution (FI) to complete credit card enrollment by verifying the victim’s personal information.continue reading »