What's New in Digital Payments: Apple Wallet Becomes Fraud Target, PayPal and Samsung Acquire, Google Expands

By

Digital wallets seem to be facing a one step forward, two steps back dilemma.

It captured headlines a few years back as several of the big credit card companies, the major communications service providers via their ISIS effort, and Google with Google Wallet, moved to get into this space early in an effort to grab market share and mindshare in the U.S. Things haven’t exactly taken off as planned, as you’ve probably noticed.

But many important companies have recently begun moving forward on the digital payments front, and attacking it in new ways. However, some of these efforts – namely, Apple Pay – are in turn also being attacked.

Apple last September announced Apple Pay would be supported in its iPhone 6 and iPhone 6 Plus devices starting in October of last year. Apple Pay was delivered in collaboration with JPMorgan Chase, and supports credit and debit cards from American Express, MasterCard, and Visa, and cards from major banks such as Bank of America, Capital One Bank, Chase, Citi, and Wells Fargo. The solution, which leverages NFC technology, is supported at Apple’s own retail locations as well as at Bloomingdale’s, Disney Store and Walt Disney World Resort, Duane Reade, Macy’s, McDonald’s, Sephora, Staples, Subway, Walgreens, and Whole Foods Market.

Privacy and security were two key themes Apple pushed when Apple Pay came out of the gate. But reports have recently been circulating that Apple Pay has been a target for fraud.

“About a month post-launch, it seems like fraud has come to Apple Pay (in one case – as high as 600bps for an issuer that I cannot name),” according to a Jan. 5 posting on Drop Labs. “Though what follows was written in the context of Apple Pay, much of it translates to any other competitor – irrespective of origin, scale, intent, or patron saint.”

And today the Apple Pay fraudster story was front page news in The Wall Street Journal, which explained: “The Apple Pay system itself hasn’t been penetrated by hackers. Rather, fraudsters are entering stolen card data into phones, which can then be used to make purchases without a physical card being present.”

According to the Drop Labs posting, card issuer implementations of Apple Pay’s Yellow Path process – which involves authentication and verification – are inadequate.

Elsewhere on the digital payment frontier, PayPal and Samsung recently have made acquisitions to help them better address mobile payments.

PayPal earlier this month announced plans to buy Paydiant. The deal, reportedly valued at $280 million, is expected to close in this month or next. Samsung earlier purchased mobile wallet solutions provider LoopPay.

Meanwhile, Google continues to work on its digital payments effort, having launched a new framework called Android Pay this week at Mobile World Congress. Noting that mobile payments have reached a new level of importance this year, Google’s Senior Vice President of Product Sundar Pichai at the Barcelona event explained that Android Pay is an API layer companies can use to support secure payments on Android in store and via apps.

The idea of delivering platforms on which businesses can support various payment types and technologies seems to be a developing theme, as PayPal’s comments at Mobile World Congress also fell into this category.




Edited by Stefania Viscusi
Get stories like this delivered straight to your inbox. [Free eNews Subscription]

Executive Editor, TMC

SHARE THIS ARTICLE
Related Articles

Tech Podcast Award Winners Bring Excitement and Enthusiasm to a Range of Important Tech Topics

By: TMCnet Staff    6/18/2025

Tech Podcast Award winners produce engaging, informative, and often entertaining content, bringing valuable insight from industry front lines to the e…

Read More

How Mobile Technology is Driving the Shift to Casino Apps

By: Contributing Writer    6/12/2025

Recent years have seen casino apps completely changing the online casino experience. Thanks to mobile-first technology, apps are becoming the default.…

Read More

Decentralized IT Management: Fad or Future?

By: Contributing Writer    6/5/2025

Managing IT feels like an ongoing balancing act for many businesses. Centralized systems often create bottlenecks, slow down teams, and frustrate empl…

Read More

IT Management as a Driver of ESG Initiatives

By: Contributing Writer    6/5/2025

Businesses today face growing pressure to meet environmental, social, and governance (ESG) standards. Customers demand greener practices. Investors lo…

Read More

Everything You Need to Know About Mobile Casinos

By: Contributing Writer    5/30/2025

We live in the age of technology and we have come to solve things on the go, whether we are talking about personal or job-related issues. We have come…

Read More