they have the consumer relationships, after all, in a way that the Android manufacturers don’t. Dynamically generated one-time use tokens (provided by Visa/MC/Amex). There is an existing fallback method for NFC payments that allows using some of the magnetic stripe data fields to encode a per-transaction value which proves that the original card has been presented to the payment terminal. By using modern technology and the latest in encryption protocols, Apple Pay is able to keep your data more secure and private than ever. Apple Pay uses the principle of tokenization, which takes a sensitive data element (like credit card information) and substitutes it with a “token” that holds no value for hackers. The acquirer creates a random number that might look like a credit card number in some cases – the token – and returns it to the merchant. 2) I beleive an iPhone user will be able to provision mulitple accounts (or credit cards) in ApplePay. In March 2014 the California DMV was notified by MasterCard of what turned out to be a six month exposure opening a window to at least 12 million transactions made during 2012. – storing a card at an iPhone triggers the TSP to issue a token which is associated to an iPhone-hardware ID. (i.e. That random number is send back to Apple… Good question. 而國際組織EMVCo也於2014年,對外公開發表正式的Tokenization Specification標準,包括蘋果及中國銀聯均採用及推動,2014年問世的Apple Pay更成為基於此標準的第一個行動支付系統。 在2014這一年,國際組織EMVCo正式發表Payment Tokenisation Specification 1.0標準。 Apple Pay is doing more than just storing your card number but that’s certainly the right mental model to use when thinking about how it all fits together. To create your Merchant ID, you must make your App ID ready. They currently don’t need to forward a cryptogram to the issuer/token service provider; it seems like they have for Apple Pay (the onlinePaymentCryptogram described in Apple’s Payment Token Format Reference). 3) Regardless, it does appear from the press that Apple is signing deals with issuers… i.e. Cryptograms (provided by card issuing banks) My guess is, they probably could, but it would work only for cards that they have issued themselves. Get 2% Daily Cash back when you use Apple Card with Apple Pay. NFC which has problems known for years. Pure speculation from me, but I wonder if the ‘different token’ per transaction concept could effectively be 2-factor authentication using something akin to a tokenized version of the CVV2. 4. I agree… and I can think of no reason why it wouldn’t work abroad, provided the card was issued by one of the US issuing banks currently onboarded by Apple. Acquirers have offered this service for ages for merchants who wanted to use it. That said then, what can banks do fend off this threat? The Secure Element encrypts the token’s payment data using either elliptic curve cryptography (ECC) or RSA encryption. Entersekt is an innovator of customer-centric fintech solutions. So, if bank who issed card linked to ApplePay must be one to supply ApplePay with valid keys to sign “card present” transactions, does that mean ApplePay had to have agreement with any such issuer bank? ... What Apple Pay tokenization means for PCI DSS compliance. My understanding is that all we need is the Tokenization Service that the schemes are providing in US. With this meteoric rise, comes the potential for increased fraud in a world full of hackers trying to steal personal data. However, the values used are cryptographically speaking very short and the transaction details are not used as an input to the signature generation; this allows for some transaction pre-play attacks. Apple Pay uses a system called tokenization, which replaces information about credit cards with other data. If you think NC3 has value see the menu for HowToGetIt and scream toward the people listed there. Makes me think that somehow this is not really running as a card present transactions (hence the dynamic security code) but they have simply negotiated “card present” rates – would be keen to hear your view. It also brings a newer, younger consumer to the credit card market which has generally preferred to use other types of payments (e.g: bitcoin). Sure… you can put somebody’s card details into the “Secure Element” of a phone (or do something clever with Host Card Emulation) but if you’re putting the real card number in there then you face all the same risks a merchant faces… if somebody were to figure out how to hack into your system, you’ve got a big problem on your hands… And in Apple’s case, imagine if almost 1 billion payment cards were compromised! Re: CA-DMV See for details, references and links. This was my thinking and tied with your last bullet on the leverage that Apple has and the reports of them negotiating discounted rates with issuers actually makes me think that have simulated a 5 party model where they take a slice of the interchange (in the form of a rebate from issuers) in exchange for using their infrastructure (and inclusion in the wallet). Maybe something more sophisticated. The answer was on page 26, section 3.8 and the introduction of the idea of a “token requestor”. Also makes for easy on-line reading. This token will only work for contactless payments”. Am I correct? Upside for those “card NOT present” transactions is that merchant does not need chip – only card number and CVV. @Andreas – I think step 2 might be slightly different. In a credit card. Written by If so, it sounds like we need Visa/MC to hurry up and bring their Tokenization service across the pond! More recently, hackers have gone to the large nodes in the network, namely large retailers and payment processors like First Data to get most bang for their investment. Would you agree? You wrote: “When you enter your card details on a merchant’s website for the first time and tick the “save my details for next time” button, the merchant doesn’t store your card details right way.” WHOA! A) I think they send the same token every time. If at __any point__ the merchant has the confidential consumer credentials then those credentials are vulnerable to security weaknesses of the merchant. Real-time monitoring. I wait update in addition. Change ), You are commenting using your Facebook account. By securing the entire transaction chain, Apple is helping the issuing banks cut down on their fraud expenses and liability, something that they may believe is worth the rumored 0.15% that Apple asked for. A nice analysis on the subject. it’s more secure than having the PAN on the phone. Great post! Apple Pay tokenization. 7,8 For maximum flexibility, M&T’s commercial card programs allow clients to opt out of tokenization. If they get hacked, it’s not as much of a problem: the tokens are useless to anybody else. To insert a payment card into a digital wallet, the card’s sensitive data (i.e., the PAN, CVV2, and expiration date) must be replaced with a token that serves as a reference to the card. Security is at the core of Apple Pay, so when you add a credit or debit card, the actual card numbers are not stored on the device, nor on Apple … This platform will also facilitate connecting BBVA cards to third-party apps like Apple Pay, Google Pay, and Samsung Pay, as well as with other e-commerce platforms. Per-merchant tokens would be more secure, but they would be much harder to use: The secure element, in some cases, doesn’t even know at which merchant a given transaction is taking place; changing that would require (extensive) modifiations to existing merchant infrastructure, which would defeat the purpose of using existing protocols. Apple Pay is a safer way to pay, and even simpler than using your physical card. ( Log Out /  It is used only as a fallback where proper EMV payments are not possible. On the android side, I wonder if the MNOs have an opportunit… Most of them have already done work with NFC. In the authorization or transaction process, the challenge is to integrate smoothly into the existing payment flow. Remember RAM scrapers at Target? Why does there need to be __any__ fourth party in addition to the consumer, the merchant and the provider? Android devices have done it in various ways for years, for example. If you’re interested in the details, see the paper linked on the presentation page below. They’ve published pre-requisites for apps that wish to use Apple Pay for payments, something which should really worry PayPal. At this stage, depending on the provider, other information may be appended to the transaction to give more visibility into other key metrics like the wallet type (Apple, Android, Samsung). Security is at the core of Apple Pay, so when you add a credit or debit card, the actual card … But now your problem is different: to avoid an adversary simply reusing a value they’d seen you use in the past, it would have to be tied to the transaction… so a signature over a representation of the transaction feels like the way to go. B) But in addition, I think they must be provisioning a secret to the Secure Element when the card is first enrolled…. Apple’s use of tokenization is the interesting part [USUAL DISCLAIMER: I have no inside info, these are personal views] I’ve been using a beta version of ApplePay on my iPhone 4 for some time now… My very old, but very effective, Barclaycard contactless PayTag, stuck to my iPhone 4… A customer using a Bank of America Visa card at a merchant using Chase Paymentech – this will work (right?). To integrate Apple Pay into your iOS app, Swift is the language you should opt for. After you take a picture of SNB Debit Card and load it into your Apple phone, Apple sends the details to SNB which replaces your debit card details with a series of randomly generated numbers (the token). The payment token has a nested structure, as shown in Figure 1-1.. Registered Trademark of Integrated Research Ltd. Follow the steps discussed below to process it: 1. Follow the steps discussed below to process it: 1. 2) I *think* the relevant key material needed to get EMV to work at POS (over NFC) is associated with the card network… so I expect it is provisioned down to the phone at time of enrollment… but I could well be wrong here. Hi @Ali – don’t know how Apple will do it but there’s the concept of ID&V (Identification and Verification) in the EMVCo spec. Subscribe to our blog. I’ve seen conflicting information on the tokens. The TSP sends the PAN and authorisation response through the acquirer to the important merchant. Apple Pay uses tokenization to store card details. Perhaps they just hash the timestamp and encrypt it using this secret? Payment processing I think you’ve pretty much summarised it by yourselves so just a few quick points: 1) Apple has now published quite some detail about how it actually works – (page 24 or so onwards). 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