How Apple Pay / Token Systems Work

[jyl]

Not sure how interested anyone is, but here is an explanation of how Apple Pay works, which is also an explanation of how token based payment systems work.

The days of credit or debit card infornation being passed around and stolen will end. In token systems, the card information exists nowhere outside of the card issuer's systems and your own wallet (if you still carry the physical card). It isn't on your phone, isn't given to the merchant, isn't transmitted over any network. There is nothing for a hacker to steal, no matter how thoroughly they penetrate the retailer's systems.

http://m.tuaw.com/2014/10/02/apple-pay-an-in-depth-look-at-whats-behind-the-secure-payment/

I don't know much about the chip and pin cards in Europe. Anyone want to point me to an article that explains their security mechanism?

[Porsche-O-Phile]

Looks excellent and makes sense although it doesn't eliminate the CC numbers entirely. It does for purposes of Apple Pay transactions but neer-do-wells will still go after the low-hanging fruit - underlying CC numbers which most people will (still) stupidly carry around with them in case some establishment doesn't accept Apple Pay.

I like it. I'll almost certainly use it and go out of my way to favor merchants that use it versus those that don't. I still have big concerns about the "big data" aspect of this - encouraging people to use traceable technologies for their purchases that are bought and sold to build ever more sophisticated profiles of them, and always used to the detriment of the customer. The way around that of course is to go cash-only but personally I hate cash - money is filthy and germ-ridden, massively inconvenient and a risk to carry around. But in a few years if the "big data" aspect isn't getting better with new privacy regulations, etc. I might still go back to it.

Apple Pay is a good technology but the underlying problem of profiling remains - and now people are handing their information to TWO major "big data" companies (the CC company and Apple), neither of which has their interests at heart rather than just one (CC company) plus the merchant.

Things to ponder...

[cstreit]

I tried using NFC for a while and my success rate with the terminals was about 30%. Stopped trying. Hope apple can do a better job.

[jyl]

Yeah, I figure it will take a year to know if this is going to work or not.

[on2wheels52]

"......but personally I hate cash - money is filthy and germ-ridden, massively inconvenient and a risk to carry around."

I must have had a few million go through my hands after 30 years in the pawn shop; I show no visible ill effects
Once a week I get a call from a vendor wanting to set me up with a credit card terminal, for every reason they say to take cards I come up with two to stay with cash.
Jim

[Porsche-O-Phile]

In 30 years you've never had a cold or a flu? If so you're a lucky guy!

[winders]

Originally Posted by Porsche-O-Phile

Apple Pay is a good technology but the underlying problem of profiling remains - and now people are handing their information to TWO major "big data" companies (the CC company and Apple), neither of which has their interests at heart rather than just one (CC company) plus the merchant.

With Apple Pay you are handing no data to Apple and no data to the merchant except the last four digits of your credit card. Only the credit card company has your full credit card data. The merchant doesn't even know your name.

[Porsche-O-Phile]

I'm not sure how you wouldn't be. Apple is brokering the transaction and even if they're not privy to the more specific details of your transaction (what exactly was bought, etc.) they certainly are tracking where and when you were when you used the service. It's not hard for them to figure out if you were in a particular store and used it what your preferred shopping habits / routines might be. Valuable information to profiling companies. If you use it at a particular place a lot or according to an identifiable pattern a lot of inferences can be made with startling accuracy - not much different from what a lot of retailers do now with CC transactions.

I personally can't stand big data and I hate profiling. I hate every damn thing about it but I dislike the inconvenience of dealing with cash transactions more - for now.

[on2wheels52]

Originally Posted by Porsche-O-Phile

In 30 years you've never had a cold or a flu? If so you're a lucky guy!

The worst I've been sick was after the only flu shot I've had; curse you Typhoid Darlene! (Cathy hates it when I call her that)
Jim