Banks Huddle to Plug Loopholes as Apple Stands Vindicated

By CIOReview | Thursday, March 12, 2015
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FREMONT, CA: After rumors emerged that Apple Pay may have been exploited to make fraudulent purchases, they were soon put to rest as it was discovered that it was not because of a vulnerability in Apple’s technology framework but the laxity shown by some banks in verifying the validity of the credit cards for using them for Apple Pay, reports Wayne Rash from eWEEK.

The reported fraudulent purchases made through Apple Pay were done using the stolen credit cards which the banks failed to take cognizance of before the fraud transactions transpired. Now that the loopholes in the entire payment authentication have been discovered, some banks have started to update their databases with accurate information about the rightful owner of a particular credit card, reports SourceMedia.

"This is a black eye that needs to heal through improved authentication procedures," said Richard Crone, chief executive officer of Crone Consulting LLC. Some banks are now requiring users to call them to activate Apple Pay, to ensure that their identities haven't been stolen, he said.  

Apple Pay has been designed to be a very safe means for digital payment transaction wherein it verifies the user’s credit card data entered in an iPhone 6 device with its own database present in the iTunes. If the data matches, the card is approved and added to the Apple Passbook where it is ready for Apple Pay; if not, then the approval process for a credit card is transferred to the bank which has to verify the authenticity of the credit card credentials.