To some people, the announcement of Apple Pay was underwhelming. Bringing NFC (Near Field Communications) capabilities to the iPhone platform, enabling cardless payments, doesn't seem earth shattering. After all, some Android devices have used NFC for a couple of years already.
But some of what Tim Cook said during the iPhone 6 announcement made me pay particular attention. If it was technically accurate, Apple Pay is reason to be cautiously optimistic that we have a new way forward to better security. Consider the following things about Apple Pay:
- Credit card account information is stored on the phone in a secure element, making the account information inaccessible directly to application software.
- Merchants are not given an account number directly, but rather a one-time usage code with which they can complete a transaction.
- Payments are authorized via fingerprint scans rather than a signature or PIN.
This trifecta of technical features could well accomplish the objective of keeping the real account data away from our adversaries.
In addition, with iOS 8, Apple claims to have stepped up personal privacy. Indeed, it says it can't decrypt encrypted data stored on an Apple device, even if presented with a lawful subpoena.
Though the details are not entirely clear yet, the preliminary indications are that Apple has come up with a pretty slick architecture. Of course, the scrutiny that will come with actual use of the new iPhones could change the perception, and it wouldn't surprise me in the least if someone were to find a problem or two.
Nonetheless, it seems as though we might finally be looking at a consumer-friendly payment system that keeps our accounts from being compromised by unscrupulous vermin.
And of course, for a system like this to succeed, merchants need to adopt it. Apple's legendary marketing muscle could make all the difference. Already, several very large merchants, including Macy's, have announced that they'll be Apple Pay early adopters.
I'm looking forward to giving my own i6 Plus a run for its money. I'm hoping it can keep the bad guys from giving me a run for my money.
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