Posted on 03/17/2015 2:00:55 PM PDT by Zhang Fei
Sorry, I disagree. The consumer is not at risk in this at all. . . you seem to assume they are. ApplePay is completely reliable from the consumer users' points of view.
The problem of fraud is of the victim banks' own making. They created their own problem by NOT FOLLOWING DIRECTIONS! This is akin to someone swallowing the entire bottle of Acetaminophen instead of reading the instructions and taking only two every four hours, then crying foul as they are carried off in the ambulance with a poisoned liver. They should have known better, but they did it anyway. The other banks read the directions and are not having any problems.
The marketing going on here is from the people who are pushing this scare mongering about ApplePay not being secure. . . such as the innuendo sprinkled throughout this article by Andrew Sorkin about where the blame for the problem should lay when it has already been well established by every other party who has looked at this exactly where the blame lies: at the feet of lazy bankers who CHOSE to go the easy route.
They are paying the price. . .
As for your Airbag analogy, sorry, that fails as well. GM is rightfully called on the carpet for the ignition switch fiasco, but over twenty car makers around the world used the faulty airbags and sensor system from the same manufacturer. . . And that fault lies with the third party maker of the airbags, not GM, Toyota, Volkswagon, or any of the other car makers who purchased the DOT certified Airbags for use in their automobiles and trucks.
What makes you think that Apple is NOT coming down on the banks on this? The reports of this fraud were all from a SINGLE SOURCE. . . Cherien Abraham, an independent blogger, who just happens to work as a marketing advisor for Samsung who is releasing a competitive payment service in a few weeks, and add that there has been no independent confirmation of these claims except from his blog. . . or anonymous sources who "speak off the record out of fear of Apple", while others say there is no problem.
Excuse me, but again you are making a major error. No user of ApplePay has ever been defrauded during their use of ApplePay.
Nor will someone whose card was used by a fraudster using ApplePay ever know it was used in an ApplePay transaction although the card owner might surmise it if the fraud was the purchase of a high end Apple product, but the bank will never tell you how your stolen card was used. It is exactly the same thing as any credit card fraud. . . just done digitally.
Heck, I had one of my bank accounts cleaned out a couple of months before ApplePay debuted by someone using my debit card as a credit card on a Windows software site using a digital wallet! They charged and downloaded over three grand of Windows games before I stumbled on it while making an ATM deposit at my bank! The credit card fraud department called me as I was talking to a banker about my suddenly emptied account! LOL! Talk about good timing. They stopped the transfers in their tracks, but it still took ten days for the bank to finish its "fraud investigation" and put my money back in my account!
Generally, a person notices unusual activity or unauthorized charges on their card and calls the bank to complain, or alternately the bank's fraud department calls the card holder because of a change in buying patterns or locations to check the unusual charges. When the owner puts them in contest for fraud, the card is cancelled. All further charges are blocked. The only reason I knew the fraud on my account was a digital wallet was that I was sitting with a banker and privileged to see the full transaction records, which showed the card transaction originating from a digital wallet with my debit card registered there. . . with a delivery address three states away.
You keep insisting that Apple fix the problem, when the problem is not fixable by Apple. It can only be fixed by the banks who issue the cards and validate them as really, truly belonging to the person who is trying to install the card in ApplePay. The ball is in the court of the injured party, the banks, and if they want to stop bleeding money, they WILL alter the behavior that is causing the wounds.
CNN Money finds that most banks are NOT having a problem, but they use very robust credit card validation for ApplePay. . . and give examples.
You, assuming you work for Apple, have a problem:
“But a sharp rise in reports of fraudulent Apple Pay transactions is raising questions about the security of the first mobile payment system to find a measure of popular success. One payments analyst, Cherian Abraham, estimated that as many as 6 percent of Apple Pay purchases are completed with stolen credit cards, or 60 times the rate of the old-fashioned plastic swipe.
The problem is that Apple Pay may be too simple to set up, security analysts said. Fraudsters have been loading stolen cards onto iPhones to buy things at stores. As it turns out, it might have been better if Apple Pay required users to do more to prove their identities when they sign up for the service, these experts said.”
That’s the Washington Compost of today.
This is Apple’s problem, unless they want to buy a bank.
I READ the Washington Post's article. . . which is a rehash of the same article that has been republished and re-printed in almost the exact same form time after time for two months now (!). These articles are ALL based on a single source: Cherian Abraham's blog of January 5, 2015, written exactly one month after the launch of ApplePay. . . a blogger in the employ of SAMSUNG, who is advising Samsung on the upcoming launch of SamsungPay.
The Washington Post article also has an error claiming that ApplePay was launched in October. It was not. It was announced in October but launched on December 5th. The level of accuracy in the rest of the article is similar.
At the time of Abraham's blog, there WERE NO RELEASED DATA on which to base his claim of 6% fraud. He also claims ". . . some banks. . ." without attributing his claim. . . except to say "unnamed sources." When self-proclaimed expert Cherian Abraham made this claim, there under 600 banks signed up with ApplePay, since his claim over 2,400 more banks have signed up with ApplePay. If it were so riddled with problems, according to this "expert", I would think they would think twice before signing up. They have not. The banks themselves are saying they are not experiencing this fraud. The ONLY source for this claim is. . . Cherian Abraham and his un-named sources. . . backed by Samsung.
The problem is that Apple Pay may be too simple to set up, security analysts said. Fraudsters have been loading stolen cards onto iPhones to buy things at stores. As it turns out, it might have been better if Apple Pay required users to do more to prove their identities when they sign up for the service, these experts said.”
One of those so-called experts in the Washington Post article also stated that it was the "merchants" who got hit with the fraud charge backs. . . which shows they are not so expert in what they are talking about. Simply not true. The issuing banks get hit with the fraudulent charges. . . not the merchants.
The banks who follow Apple's requirement for bank sourced two-factor validation of any card placed into ApplePay are NOT experiencing this fraud. When I placed six cards into my iPhone 6, every single bank issuer of my credit and debit cards either called me or e-mailed me at the phone number or email address I had previously provided them on opening the account to provide a six digit PIN to enter into ApplePay to activate the service. Not one just willy-nilly turned on the card without first confirming the card actually belonged to me. I have also take to many friends who are using ApplePay quite safely. . . without problems, and everyone of their card issuers did exactly the same thing. I have not found one who told me the card just started working as Cherian Abraham claims is the method ApplePay uses. He LIES!
This has all the hallmarks of an organized FUD campaign. . . single source data, repeated articles citing the same source, re-publication as the frenzy dies down. . . etc. FUD. . . most likely paid for by Samsung and perhaps Google to support the use of GoogleWallet and their upcoming replacement. It is nothing new. Both have done it before.
What are the ramifications to the supply chain for not following the, um, requirements Apple imposes?
What "supply chain" are you blithering about? These banks are not Apple "suppliers", they are regulated financial institutions, and not using the required two-factor authentication of their own credit/debit cards they issued carries its own ramifications and a built-in penalty. . . credit/debit card fraud. They know this. . . as I said, the banks themselves deny this is happening. Only Cherian Abraham, in his blog, which had exactly eight (8) replies, the majority of which roundly criticized his claims for lack of any foundation for his conclusions, has made these accusations. . . and no other source has corroborated has specious claims! The card issuing banks themselves say it is NOT HAPPENING at the level Abraham claims. . . It requires sheer stupidity on the part of the issuing bank for it to occur. . . and no one has come forward to say they were able to simply activate ANY card without having to go through a validation process, no one at all!
If history is any guide, and if they were Apple suppliers in the supply chain acting in violation of their contract, Apple would pull their contract and blacklist them from future contracts.
Apple has done this in the past to suppliers in Apple's supply chain who had egregiously violated contract provisions in the past who had refused to correct the conduct. . . even contracts that cost Apple billions to find a different supplier. Apple contracts have teeth in them, consequences for not complying with the agreement.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.