March 30, 2015

Last week’s Washington Post interviewed Digital Disruptions’ founder, Amitabh Saxena, on fraud in Apple’s recently launched mobile payment service (see A few weeks ago there were several mentions in the press about some banks experiencing higher-than-expected fraud rates for Apple Pay. The source of the issue appears to be fraudulent cards being provisioned during registration (rather than any issue during payment transaction). While Apple Pay is not yet available “in-browser” (consumers can purchase goods “in-app”, such as on iTunes, Starbucks, Uber, etc), select online merchants are rumored to be participating over the summer – in other words, to add “Apple Pay” as an acceptance mark in the same manner as they do currently with Visa/MC/Amex and PayPal. If they suspect there are bad cards in the system, they’ll be wary of accepting Apple Pay and absorbing any card-non-present fraud.