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Could security concerns sink Apple's mobile payment platform?

Friday, September 12th 2014 by Cable.co.uk
Could security concerns sink Apple's mobile payment platform?
Apple's new mobile payment platform will probably face intense scrutiny on the security front.

It wasn't just two new phones and a smartwatch that Apple announced this week. You'd be forgiven for having missed it, but the Cupertino company also took the wraps off a new mobile payment platform – something it's been rumoured to have in the pipeline for years.

The existence of Apple Pay is exciting for a number of reasons. While plenty of high-end Android manufacturers have used the same contactless transaction technology – Near Field Communication, or NFC – in their devices before, none of them have Apple's track record when it comes to popularising new hardware. Look at the MP3 player, smartphone or tablet computer – all devices that, like them or loathe them, came of age with Apple products.

If Apple Pay takes off, there's the tantalising possibility that retailers will finally start accepting contactless transactions en masse. Whether we carry an iPhone 6, an Android device or an NFC-enabled SIM card – as used in Vodafone's upcoming mobile payment service – we might all end up tossing our wallets sooner rather than later.

Except there's a snag. The launch of Apple Pay has not come at an opportune moment, because we're at a point in time that payment systems are facing intense scrutiny on the security front.

For starters, the past year has seen some of the biggest data breaches of all time, most of which affected retailers. Take the theft of 40 million credit and debit card numbers from US chain Target in December 2013, or the incident at Home Depot that's only just coming to light – the general feeling at the moment is that consumers need to be very, very cautious about who they trust to handle banking data.

Then there's the fact that Apple was itself at the centre of a security scandal last week, which must have had the company's top execs kicking themselves. It's understood that of the hundreds of explicit photographs of celebrities posted online at the end of August, the majority were stolen from compromised iCloud accounts.

This wasn't because of a systematic data breach, but rather because the hackers had been able to steal the victims' passwords through elaborate social engineering schemes. In what was presumably a hastily put-together statement, Apple did its best to wash its hands of the affair: "Certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the internet," it said.

Not all security experts were convinced, however. It soon became clear that the company's two-factor authentication system could be bypassed, while hackers were also able to make an unlimited number of attempts to guess passwords without being locked out.

It goes without saying that these oversights have met with much derision, if not outright disbelief, from the security community. Accordingly, there's likely to be some residual doubt over Apple Pay – is this really a company we want to trust with our most sensitive information?

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