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12 Nov

The Tech Behind Apple Pay: Is Your Money Secure?

Go ahead and forget your wallet. Apple’s new mobile payment system, Apple Pay, launched on 20th October, 2014 and while some have questioned whether the technology is safe, security experts say it may actually be safer than swiping your credit or debit card.

Apple Pay uses a security protocol — known as the EMV standard — that other mobile wallets don’t use, Ferenczi told Live Science. The credit card companies Europay, MasterCard and Visa first developed this standard in the 1990s and it’s widely used in Europe, as well as other parts of the world.

Credit cards that use the EMV standard are equipped with microchips that store sensitive data. These so-called chip-and-PIN cards are considered more secure than the “magstripe” credit cards used in the United States because card numbers and transaction details are encrypted before being sent to a merchant’s computer, or point-of-sale terminal.

In the case of Apple Pay, EMV takes the form of a process known as “tokenization”.

“Once you enroll a card, [Apple] doesn’t actually store the card number itself on the device or on its own servers,” Shier told Live Science. “They store a digital representation, or token, which is a 16-digit code that is meant to represent your card within the ‘secure element’ of the iPhone itself.”

The secure element is a microchip located inside the phone that’s distinct from the phone’s regular memory, according to Shier. It’s not backed up to the cloud, Shier said, which means you don’t have to worry that your real credit card numbers will be stolenif someone hacks your iCloud account.

When you make a payment with Apple Pay, the merchant receives your device token, as well as a unique code that is generated for the specific transaction. Both of these codes are also shared with the other parties involved in the payment process, such as banks, credit card companies or third-party processors.

The fact that none of these parties ever see real card numbers is good news for consumers, according to Shier. It means that if a merchant falls victim to a data breach, customers who paid with Apple Pay are much less likely to have their card numbers stolen.

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