-
Western Union is adopting a vastly different use of Apple Pay than what banks and merchants have so far considered.
January 28 -
Banks are still throwing support behind Apple Pay 10 more banks signed up for the service in mid-December. Yet many say they're keeping their mobile wallet options open.
December 31 -
The growing influence of nonbank companies poses a danger to the financial system, and perhaps a national security threat, BB&T's Kelly King says during a wide-ranging conversation among big-bank CEOs.
November 21
Apple Pay, which pre-rollout was praised for its
The criticism was directed not at Apple's transaction security, which relies on
In a rebuttal, entitled, "
Because banks have responsibility for verifying new cards for Apple Pay, the security hole if you can call it that exists on the bank's end.
Apple does provide issuers with information to help them decide whether to validate a new user, noted Avivah Litan, vice president at Gartner. It provides the potential customer's device name, current location, and whether or not the customer has a long history of transactions within iTunes.
A bank can decide whether a credit or debit card requires additional verification, according to the Apple
Wells Fargo requires some customers to provide additional verification to add a card to Apple Pay. Customers will be directed to either call in to verify or to download the Wells Fargo Verify app, according to bank spokeswoman Hilary O'Byrne. The app will guide the customer through the verification process.
JPMorgan Chase provided this statement, which reflects several other large banks' stance: "Chase customers are not liable for any unauthorized purchases on their accounts. We monitor accounts for suspicious activity, and notify customers immediately if something unusual is detected." More than a million Chase customers have signed up for Apple Pay.
"I'm assuming the banks' familiarity and comfort with onboarding cards into Apple Pay is not where it should be, but it's a new process so they're not sure what to do," said Andy Schmidt, research director at CEB TowerGroup. "Some will automatically onboard. My American Express card was instantaneous. For my Bank of America card I had to call and get them to load it for me."
There are a few ways banks can strengthen their processes for verifying new cards in Apple Pay.
One is to require that the cardholder call in to get the card set up on Apple Pay, and to ask for more than the basics such as the last four digits of the customer's Social Security number.
Another approach is to ask customers to use authenticate their phones with Apple's TouchID fingerprint technology. That way, "the bank knows you own the phone and is assured you are allowed to have access to that," Schmidt said.
Alerts can also be helpful. If the customer received notification every time his Apple Pay account was used, he'd be likely to identify fraud quickly.