Fraud Rampant In Apple Pay

PvtVoid writes with this report from the New York Times, excerpting: An industry consultant, Cherian Abraham, put the fraud rate [for Apple Pay] at 6 percent, compared with a traditional credit card fraud rate that is relatively minuscule, 10 cents for every $100 spent. [i.e. one tenth of one percent]. The vulnerability in Apple Pay is in the way that it — and card issuers — "onboard" new credit cards into the system. Because Apple wanted its system to have the simplicity for which it has become famous and wanted to make the sign-up process "frictionless," the company required little beyond basic credit card information about a user. Nor did it provide much information to the banks, like full phone numbers and addresses, that might help them detect fraud early. The banks, desperate to become their customers' default card on Apple Pay — most add only one to their iPhones — did little to build their own defenses or to push Apple to provide more detailed information about its customers. Some bank executives acknowledged that they were were so scared of Apple that they didn't speak up.

Comments

Re:Calculated risk

[DogDude]

Except that Apple Pay is at contractually negotiated rates,

Yes, Apple will continue to provide this service for no cost, and the card processors will continue to absorb the fraud for no cost.

You have never had a merchant account. There's a fee increase from Visa/MC almost monthly for something or another. The fees will skyrocket, and anybody dumb enough to be using Apple Pay will pay "card not present" or more very shortly, I'm sure. It's low now to suck people in, but they'll get walloped with the fees soon, I'm sure.