A Comprehensive Outline of the Security Behind Apple Pay

Apple has described its new Apple Pay payments service, which is designed to be the first step towards the company's goal of replacing the wallet, as "easy, secure, and private." Apple Pay includes several different features that offer customers much greater security than a traditional credit card, including Device Account Numbers that replace credit card numbers, dynamic security codes for each transaction, and biometric payment verification through the use of Touch ID.

Ahead of the release of Apple Pay, TUAW's Yoni Heisler has taken an in-depth look at the security features built into the payments service, outlining the ways Apple is safeguarding customer information.

While Apple Pay is built on existing NFC technology, Heisler's research suggests it is the first implementation of the EMVCo tokenization specification, a newly introduced security framework designed to cover emerging payment methods. According to former credit card executive Tom Noyes, this specification is "the most secure payments scheme on the planet."

applepaytouchid
As previously rumored, Apple Pay utilizes a "token," which the company refers to as a Device Account Number, to replace a user's existing credit card number on the iPhone. A randomized 16-digit number, the Device Account Number ensures that no merchant is able to obtain a user's credit card number, protecting consumers from retail security breaches, as TUAW points out, because tokens are randomized numbers that cannot be decrypted back into a credit card number.

Device Account Numbers, or tokens, are paired with a dynamically generated one-time use code that replaces the credit card's CCV with every transaction.

Providing an additional layer of security, an Apple Pay-equipped iPhone at the time of each transaction also sends a dynamically generated CVV up the chain along with a cryptogram. The CVV is the three-digit string located on the back of your credit card and, in the case of Apple Pay, is a algorithmically-generated dynamic string that's tied directly to the token. The cryptogram itself "uniquely identifies the device" that created the token and, according to the EMV Payment Spec, is likely composed of encrypted data sourced from the token, the device itself, and transaction data. Note, though, that the precise components of the Apple Pay cryptogram aren't publicly known.

As noted by Heisler, a Device Account Number can't be used in a transaction without an accompanying one-time use cryptogram, which verifies that the "token in transit originated from the device being used." Cryptograms also carry transaction information like the merchant's identity and the amount of money being charged.

The transaction comprising the Device Account Number and accompanying cryptogram is further verified through the use of Touch ID, which essentially replaces insecure verification methods like passwords and PINs.

According to a credit card executive who spoke to TUAW, token transactions as implemented by Apple "are a new and much higher standard of security for electronic payments."

The amount of security built into provisioning tokens and supporting transactions is a new standard that I think will definitely shift fraud patterns going forward.

Apple Pay is expected to go live in October, enabled through an update to iOS 8. Hints of Apple Pay have already been found in the iOS 8.1 beta, which was seeded to developers on Monday. TUAW's full look at the security behind Apple Pay, which covers tokens, Touch ID, and more, is well worth a read.

Related Roundup: Apple Pay

Top Rated Comments

GeneralChang Avatar
84 months ago
A matter of time until someone's finger is hacked off? And, didn't they already hack the touch-ID system?

You mean that convoluted system that required a perfect copy of the persons fingerprint and something like four hours of fabrication? I wouldn't really call that "hacked." By the time they got a dummy fingerprint made up, I'd have realized my phone was missing and locked it via iCloud.
Score: 45 Votes (Like | Disagree)
vpndev Avatar
84 months ago
Gw

And for all the Google Wallet fans out there, tokenization is a key differentiator between Apple Pay and Google Wallet.

So please lay off the comments saying that you've been using this for years. You haven't.

However I don't expect that Google will dawdle with incorporation of tokenization (which is an EMV standard - by no means exclusive to Apple). A decent fingerprint reader might take longer.
Score: 31 Votes (Like | Disagree)
taptic Avatar
84 months ago
Apple: setting the example of security and privacy for Google and the NSA since forever.
Score: 26 Votes (Like | Disagree)
ptb42 Avatar
84 months ago
Let's get this out of the way now...

No, a merchant doesn't have to sign up for :apple:pay. All of this is done on the back-end, by the credit card processing networks and the card-issuing banks.

If a merchant supports contactless card payments (PayWave, ExpressPay, PayPass), they can accept payments from your iPhone 6.

Merchants have to replace their point-of-sale terminals before 10/2015 anyway, if they haven't already done so. If their terminal doesn't accept EMV chip cards, the merchant will assume liability for fraudulent transactions.

The only determining factor is whether a merchant chooses to spend a bit extra money to add the NFC option to their point-of-sale terminal.

I'm tired of all the people complaining about "deficiencies" in :apple:pay, when they clearly don't even know how it is being implemented. Go read the referenced article, if you don't yet get it.
Score: 14 Votes (Like | Disagree)
taptic Avatar
84 months ago
A matter of time until someone's finger is hacked off? And, didn't they already hack the touch-ID system?
The chances of their being a psycho that starts shooting people in public are probably higher than a psyhco chopping peoples fingers off to shop with at CVS.

And no, people replicated someones fingerprint, but they need to have the original and a lot of time and patience. It's not much of a hack really...
Score: 13 Votes (Like | Disagree)
greytmom Avatar
84 months ago
Folks, if you are being held at gun or knife point so that a thief can get your pin or password, you've got bigger issues than the thief going on a shopping spree.
Score: 10 Votes (Like | Disagree)

Top Stories

jon prosser imac 2021colors

Prosser: 2021 iMac to Come in Five Colors, Apple Silicon Mac Pro to Resemble 'Stacked' Mac Minis

Wednesday February 24, 2021 7:26 am PST by
Hit-and-miss leaker Jon Prosser has today alleged that the upcoming 2021 iMac models will offer five color options, mirroring the colors of the fourth-generation iPad Air, and revealed a number of additional details about the Mac Pro with Apple Silicon. In a new video on YouTube channel FrontPageTech, Prosser explained that the redesigned iMacs will come featuring options for Silver, Space ...
First Look Big Sur Feature2

Apple Releases macOS Big Sur 11.2.2 to Prevent MacBooks From Being Damaged by Third-Party Non-Compliant Docks

Thursday February 25, 2021 10:07 am PST by
Apple today released macOS Big Sur 11.2.2, the fourth update to the macOS Big Sur operating system that launched in November. macOS Big Sur 11.2.2 comes two weeks after the release of macOS Big Sur 11.2.1, a bug fix update. The new ‌‌‌‌macOS Big Sur‌‌‌ 11.2.2‌ update can be downloaded for free on all eligible Macs using the Software Update section of System Preferences....
microsoft edge ios android

Bill Gates Says His Preference for Android Over iPhone is Due to Pre-Installed Software

Friday February 26, 2021 3:35 am PST by
Microsoft co-founder Bill Gates this week participated in his first meeting on Clubhouse, the increasingly popular invite-only conversation app, where he fielded a range of questions as part of an ongoing book tour. Gates was interviewed by journalist Andrew Ross Sorkin, and given that the Clubhouse app is currently only available on iOS, naturally one of the questions that came up was...
flat mbp 14 inch feature yellow

Redesigned 14-Inch MacBook Pro Expected to Feature Brighter Mini-LED Display With Slimmer Bezels and More

Thursday February 25, 2021 7:48 am PST by
Apple plans to unveil new 14-inch and 16-inch MacBook Pro models with Mini-LED-backlit displays in the second half of this year, according to industry sources cited by Taiwanese supply chain publication DigiTimes. The report claims that Radiant Opto-Electronics will be the exclusive supplier of the Mini-LED backlight units, while Quanta Computer is said to be tasked with final assembly of the...
m1 mac mini

M1 Mac Users Report Excessive SSD Wear

Tuesday February 23, 2021 7:07 am PST by
Over the past week, some M1 Mac users have been reporting alarming SSD health readings, suggesting that these devices are writing extraordinary amounts of data to their drives (via iMore). Across Twitter and the MacRumors forums, users are reporting that M1 Macs are experiencing extremely high drive writes over a short space of time. In what appear to be the most severe cases, M1 Macs are sai...
steam apple logo

Valve Ordered to Give Apple Information on 436 Steam Games As Part of Epic Games Legal Case

Thursday February 25, 2021 1:50 am PST by
Valve, the makers behind popular game distribution platform Steam, will be forced to hand over aggregate historical sales, price, and other information on 436 games hosted on the store to Apple, as part of the Apple vs. Epic Games antitrust case. As reported in a paywalled report by Law360, during a virtual discovery hearing on Wednesday, U.S. Magistrate Judge Thomas S. Hixson ordered that...
2021 mbp sd slot feature2

Kuo: New MacBook Pro Models With HDMI Port and SD Card Reader to Launch Later This Year

Monday February 22, 2021 8:52 pm PST by
Apple plans to release two new MacBook Pro models equipped with an HDMI port and SD card reader in the second half of 2021, according to analyst Ming-Chi Kuo, who outlined his expectations in a research note obtained by MacRumors. The return of an SD card reader was first reported by Bloomberg's Mark Gurman last month. "We predict that Apple's two new MacBook Pro models in 2H21 will have...
apple store macarthur center

Apple Store at MacArthur Center in Virginia Permanently Closing Following Years of Safety Issues at Shopping Mall

Thursday February 25, 2021 4:45 pm PST by
Apple today indicated that its retail store at the MacArthur Center shopping mall in Norfolk, Virginia will be permanently closing after over 14 years of business, although an exact closure date has yet to be announced by the company. Apple has assured that it will be offering all employees at the store other positions within Apple, and said that it looks forward to continuing to serve...
qualcomm snapdragon x60 5g

iPhone 13 Lineup Expected to Use Qualcomm's Snapdragon X60 Modem With Several 5G Improvements

Wednesday February 24, 2021 8:10 am PST by
Apple's next-generation iPhone 13 lineup will use Qualcomm's Snapdragon X60 5G modem, with Samsung to handle manufacturing of the chip, according to DigiTimes. Built on a 5nm process, the X60 packs higher power efficiency into a smaller footprint compared to the 7nm-based Snapdragon X55 modem used in iPhone 12 models, which could contribute to longer battery life. With the X60 modem, iPhone...
anker magsafe powercore battery pack

Anker Releases MagSafe-Compatible Battery Pack for iPhone 12 Lineup

Tuesday February 23, 2021 7:49 am PST by
Following rumors that Apple is working on a MagSafe battery pack for iPhone 12 models, popular accessory maker Anker has beaten Apple to the punch with the release of its PowerCore Magnetic 5K Wireless Power Bank. First previewed at CES 2021, the PowerCore battery pack magnetically attaches to the back of any iPhone 12 model and provides 5W of wireless charging. With a 5,000 mAh capacity,...