Credit card fraud is a major concern for business owners, especially as criminals become savvier. Even major corporations are not immune, as several high-profile data breaches over the past few years have shown. Technology is evolving to combat the problem, including the government mandated switch to EMV-compatible terminals in 2015, but new tech always comes with a learning curve. The newest payment technologies to surge onto the scene are mobile payment services like Apple Pay, Samsung Pay, and Google Pay. How secure are these mobile payment technologies when compared to EMV cards? Let’s find out.

Back Up. What’s EMV Again?

In the early 2010s, new technology was developed to better protect consumers from credit card fraud. The traditional mag stripe card was too easy to clone, and the industry needed to stay a step ahead of fraudsters. Enter EMV technology, more commonly known as “chip cards.” With the addition of a security chip that is inserted into the terminal during a transaction, these cards are significantly more secure and more difficult to copy. In fact, they worked so well that the US government mandated that all businesses upgrade to terminals that can accept these cards in 2015.

OK, Got It. So What’s Apple Pay?

Apple Pay (and its competitors Samsung Pay and Google Pay) are mobile payment technologies that allow customers to pay with their smartphones. Customers load their card data into a wallet app on their phone or tablet, then hold their device near the credit card terminal when they’re ready to check out. This is called near field communication, or NFC, and is already the standard in many parts of the world. The device doesn’t actually need to touch the terminal during the transaction, and there is no physical card needed.

Which is Safer?

EMV has been around a bit longer than Apple Pay, but that doesn’t mean it’s safer. Apple Pay uses a process called tokenization to process transactions so that financial data is never directly handled by Apple or the business. Instead, once a customer uploads their credit card data to their smartphone their account numbers are replaced by special randomly generated IDs called tokens. These tokens are used to authorize a single transaction before disappearing. This makes it extremely hard for thieves to steal card information because the token is useless once the transaction is completed. Chip cards can use tokenization as well, although this feature isn’t necessarily standard on all terminals and may come with an extra cost.

Anther key benefit of Apple Pay and its competitors is that it works online as well as offline, if the website supports it. When making an ecommerce purchase, a chip card is no more secure than a traditional mag stripe card. Apple Pay’s tokenization, however, allows for secure transactions with single-use tokens even at online retailers. In today’s increasingly digital world, this is an important distinction. Using a late-model iPhone, iPad, or Mac device, customers can make online transactions with the same peace of mind as they can in store.

Keeping Up with the Latest Tech

Is your business ready to accept Apple Pay in store and online? If not, you’re opening yourself up to security risks as well as refusing to support an increasingly popular way for consumers to pay. Contact your credit card processor to make sure that your credit card terminals are set up to accept Apple Pay. If your processor can’t help you with this, give us a call at 1-855-360-0360 or drop us a line on our website. We’re ready to help your business become more secure with mobile payment technologies.

PS – Learn about the different types of EMV cards here.

PPS – Learn how to combat online credit card fraud here and here.