Even with the recent compromises at Target (which affected 40 million credit and debit cards), Home Depot and UPS, banks and financial institutions are pretty enthusiastic about Apple Pay, the latest service to enter the payment ecosystem.
Banks are so confident in the security of Apple Pay that they will be assuming all liability for any fraudulent purchases that might occur. In other words, customers and merchants will face zero liability for fraudulent transactions.
According to USAA Assistant VP Vikram Parekh, “The bank has liability for any purchases made when Apple Pay is offered and used as the form of payment. This is true for both face-to-face and for “in-app” purchases.”
One of the ways Apple is securing the payment service is via the use of Touch ID. With the Touch ID feature, the purchaser has to confirm the purchase using their fingerprints on the Touch ID sensor found in the iPhone 5s, iPhone 6 and 6 Plus.
Apple also swaps a consumers account number with an encrypted unique Device Account Number. A DAN keeps the consumers information away from Apple, merchants, and ultimately, hackers.
Chase spokesman, Paul Hartwick, claimed that utilizing the Apple Pay functionality will be exceptionally secure and customers will be protected no matter what.
For additional news on Apple, visit the PYMNTS.com Apple Pay EcoSystem.
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