Originally Posted by
patrick.barnes
Regarding Apple Pay, there's no need for Apple to partner with any retailers, unless they're adding the button to their apps, which is not interesting in any way.
The interesting and unique thing about Apple's implementation is the partnerships at the network and issuer level. This allows them to emulate contact less EMV for existing cards without having to man in the middle like Google Wallet.
That means all the rewards and benefits of existing cards stay the same, but all of a sudden everyone gets secure transactions.
It's a huge deal and will make retailers install PayWave/PayPass/ExpressPay capable terminals.
This gets way more interesting when the Apple Watch gets launched.
It looks like it took Apple and the payment networks have been working on this more than a year. Visa alone dedicated 750 employees to perfect the tokenization system that obfuscates credit card numbers in Apple Pay. Unlike with ISIS and Google Wallet, it seems like the payment networks have really put their weight into making sure Apple Pay succeeds.
Tokenization should also render credit card breaches like Targets nearly meaningless. If you used Apple Pay, a hacker in a Target like breach wouldn't even be able to get your credit card number, let alone anything else. This means that in the event of a hack, you wouldn't have to worry about anything. Keep in mind that the current EMV standard does not preclude the use of a dynamic PAN, it's just that no other bank or payment system uses such extreme security measures. With tokenization, Apple Pay is essentially the most secure realization of the current EMV standard.
From
the Verge:
The system behind those tokens was first agreed upon about a year ago, according to Rajat Taneja, executive vice president, technology, at Visa. "We are at this very important moment in the industry," Taneja says, "there is a common standard." His company dedicated 750 people and a year of time to perfect it, and other companies like MasterCard dedicated similar efforts to their own implementations. But the more important thing is that there is a common implementation of this token system. It’s been a rare piece of collaboration and agreement between all the various players in the banking space, and it’s not much of a coincidence that it’s being implemented on Apple’s devices.
James Anderson, group head and SVP, mobile and emerging payments at MasterCard, says that his company began working with Apple in 2013. Like Taneja, he’s excited about the possibility of finally seeing a ubiquitous, commonly-used standard for mobile payments. In particular, he pointed out that his company was able to develop a new system for digitizing credit cards that’s easier than what’s come before. Just "getting the consumer ready to pay" in the first place was a huge pain point before, but now the banks are able to securely get you set up with a photograph of your credit card and some back-end verifications of your identity.