UL Breaks Down Apple Pay - What We Know So Far

UL, a global security science company has released a detailed white paper breaking down the new Apple Pay mobile payments scheme.

You may know that Apple Pay is featured on the new iPhone 6 and 6 Plus and is based on near field communication tech.

Payment card details, along with the user’s fingerprints are stored in the phone’s secure element. The card details are tokenized, meaning each card is assigned a unique Device Account Number, and no payment information is stored on Apple’s servers.

When making a transaction, the merchant never receives the Apple Pay-using customer’s card info. Instead, they receive the token and a security code linked to the transaction for verification.

This would severely limit the profitability of attacking merchant networks and POS systems. The recent data breaches at major retailers in the last year have demonstrated the risks of storing sensitive customer information.

Apple Pay is complementary to the iTunes ecosystem. ITunes users can link their cards to Apple Pay; add cards by entering their card info, or by simply snapping a picture.

According to UL, the main goal of Apple Pay is to sell more iOS devices and bringing people into Apple’s ecosystem. The company expects Apple to announce new iPads with TouchID and support for Apple Pay, combined with the announced Apple Watch for next year, bringing even more consumers into the fold.

This will broaden the iTunes customer base. Apple Pay meanwhile, aims to deliver consistent and user-friendly mobile payments – qualities that card issuers, banks, and other payments players have missed the mark on by being self-defeating in competing amongst each other.