Bad news for Apple Pay:
"APPLE PAY FRAUD RATES INCREASE 6000% OVER NORMAL DEBIT SWIPES"
"As the technology wars heat up in the merchant payment industry, the establishment’s foray known as Apple Pay has run into some major identity theft and fraud issues. NFS (Near Field Communications) may be clever. Biometric fingerprint scans into iPhones can make a user feel safe and secure, or just forward the user’s information to unknown third parties. At the core of the problem is the weakest link in the Apple Pay chain. The debit card itself.
Fraud and Identity Theft quickly join Apple Pay
Apple gets a nice .15% fee for every Apple Pay based on Apple’s salesmanship on the idea that their new system is more secure than the average credit or debit card swipe. According to Cherian Abraham, who is an advisor to SimplyTapp, which provides the host-card-emulation technology used to allow contact-less payments on devices using Google’s Android operating system, this problem came to light last month. He exposed it in his original blog post, and the problem appears early on in the Apple Pay process.
When a new credit or debit card is entered into the Apple Pay system, Apple sends the user’s information, such as last four digits of the social security number and location. If the information doesn’t match up, the bank will require a call from the consumer to confirm. The bank usually asks for the user to verify the last four digits of their social security number. Banks are reticent to ask too many questions, which would make the process arduous and more inconvenient, dissuading users from using Apple Pay.
According to Abraham, organized crime rings hand out pre-provisioned devices to mules, who then commit fraud with them. Hotbeds for this type of activity occurring include the areas around Miami, FL, and Dallas, TX. Untraceable prepaid cards are the preferred tool of choice, with their quick ability to exchange for goods or cash. Many times, the fraud ring hits Apple stores areas themselves. Isn’t that ironic? This scourge has shown fraud rates rise from 0.1% of overall debit/credit swipe transactions to up to 6% in recent Apple Pay transactions, dependent on bank and area.
Unable to refute the rampant fraud claims, all an Apple Pay spokeswoman could say in response was
“Apple Pay is designed to be extremely secure and protect a user’s personal information. Banks are always reviewing and improving their approval process, which varies by bank.”
Are fraud and identity theft exclusively an Apple Pay problem? Of course not. The new system just has some weaknesses that the criminal underworld has quickly borne out. Debit/credit card based programs are rife with fraud, as shown by the recent cases of mass consumer compromise at major retailers like Target and Home Depot. Tens of millions have had their personal accounts compromised throughout the U.S. using these now antiquated monetary transfer systems. Criminals with 21st century computer technology easily prey upon debit/credit card users.
These kinds of issues are some of the many upgrades Bitcoin provides over the 1950’s technology of the debit card. Transactional fraud and identity theft are virtually non-existent in the Bitcoin ecosystem. Apple Pay didn’t say they could beat that juggernaut in the debit card system, but they did say it would cut it from it’s current rates, and that hasn’t happened.
The establishment is fighting a tech battle against Bitcoin using technology that’s only sixty years old. It seems to be going about as well as can be expected."
https://www.cryptocoinsnews.com/apple-pay-fraud-rates-increase-6000-normal-debit-swipes/This is extremely important Breaking News. Perhaps the Headline should be revised to Read: “Bad news for Apple Pay (and Credit Card Companies)”.
It may take years for enough people to understand, but there are radical differences in the production, accounting, storage, and transfer of digital currency as oppose to fiat currency. Essentially there are two very different systems with different philosophies in the creation, storage, book keeping, exchange of assets, and transfer of wealth. Many major business decisions and investments have been made without a sufficient understanding of the total package. Too many articles have been written and published with the wrong conclusions due to a lack of sufficient understanding of both systems. I can write a book on this, or include a chapter in a book if I only have enough hours left at the end the day.
Let me briefly cover three vital differences between the two systems that are in play here. There are more, in fact many more, to the extent that I have no doubt that digital currency is far superior to fiat currency when we compare and contrast them in a complete and object manner. I am conclusive that digital currency is the future of money, in this digital age. Of course, there are problems, issues or weaknesses, including volatilities, liquidity, store of value and mass acceptance as a medium of exchange. DNotes will continue to resolve all those problems over time and at a minimum, DNotes will reach a level that is equal to or better than any other fiat currency within the next few years.
Fiat currency and its associated credit and debit card payment network systems are based on an absolute dependency on personal identity with multiple exposures that can be and have been compromised. With multiple intermediaries requiring proof of identity for the release of funds, loans and credit approval based of the “holder” of the required private information, this has been proven repeatedly to involve high risk exposures. In practical terms, your personal records are not so private because they are required to be exposed during the transaction, approval and data storage processes.
This has been and will continue to be a huge problem. There is no viable solution on top of a highly inefficient and costly banking and payment network system. Another major difference is that, whether you are going consider it as good or bad, they do keep their ledger and book keeping private. Furthermore, you don’t always need to have the funds already in your account to write a check and pay someone. The holder of your private information is the one granted the ability to add funds to your account (new loan and credit card) or pull funds from your account.
In brief, our current banking, credit and debit card payment network systems must have your private information to conduct business. However, they do keep your transactions private. You can also get away in writing a check to pay someone without money in your account.
By comparison, digital currency does not require or store any private information. It can only be pushed out, or spent by the holder of the private key to the digital wallet. If you don’t have the key to get inside the wallet, you can not “push” the funds out. In addition, you can not send more funds than what is available in the wallet. In this case, it is like the cash in your fiat currency wallet. You can not spend more in cash than you have. Furthermore, all of your transactions and balances are verified and confirmed, by a massive peer to peer computing network, based majority consensus to be legitimate and correct. Only then it is recorded and displayed in a public ledger for everyone to see and verify. Once confirmed, the transaction is not reversible.
This is a far superior system. Those who are yet to be convinced are either uninformed, misinformed, totally misled, or given up on the possibility that digital currency can be stable and a good store of value.
Bitcoin alternative DNotes has demonstrated that stability and good store of value are achievable as demonstrated throughout its existent since February 18, 2014. It is now taking the next major challenge to demonstrate that digital currency is a superior medium of exchange. Equipped with CryptoMoms, DNotesVault, and a whole family of savings plans for the consumers and small business owners, mass acceptance of DNotes as a store of value and a medium of exchange may be only a couple of years down the road. As obstacles of volatilities and store of value are put to rest, the doubt on the superiority of digital currency over fiat currency will become more compelling. Supportive mainstream media and regulators will go a long way in extracting the best of an immensely innovative technology with positive world changing implications.
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Dear DNotes supporters,
Please make an extra efforts to comment on this post. I am considering using the framework of this article for an industry press release. Thanks.
