When Tim Cook unveiled Apple Pay, the company hailed it as a simple contactless payment solution that also brings extra security to credit cards.
Apple Pay's security problem has nothing to do with Touch ID, NFC, Apple's secure element, or stolen iPhones. All of that is locked down as tightly as Apple advertised.
The problem, according to an unconfirmed report from DropLabs, is that Apple Pay is so easy to use, fraudsters don't even have to create a physical fake card anymore. According to Drop Labs' report, scammers have gone with a much more low-tech way to take advantage of Apple Pay.
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Instead of hacking the hardware, fraudsters are just buying stolen consumer identities, complete with credit card info, and loading that into Apple Pay. This allows them to create a fake digital credit card without going through the hassle of printing it out on plastic to use in stores...
Regular credit cards have an average fraud level of 1%, meaning $1 out of every $100 charged is fraudulent. But Drop Labs claims some Apple Pay banks have seen their fraud levels jumps up to 6%. Apple and its banking partners can easily fix this by dropping the call-in option altogether, and we expect fraud rates will drop soon. But this just proves even the strongest chain is only as good as its weakest link.
Article by Buster Hein. [ READ MORE HERE ]