Fraudsters target Apple Pay

By Nicole Miskelly | 6 March 2015

It hasn’t been a great week for Apple, first Samsung announced Samsung Pay a new rival in the mobile payments space and now Apple Pay has been targeted by a number of fraudulent transactions using credit-card data stolen from big retailers, including Target and Home Depot.

According to a report by the Wall Street Journal, around 80 per cent of the unauthorised purchases have been made for big items purchased with smartphones at Apple’s own stores.  Although Apple’s system has not been hacked, thieves are entering stolen credit card data into smartphones to make large purchases.

The Apple products being purchased have a higher resale value than most other goods available from many merchants signed up to the Apple Pay system, such as McDonald’s and Walgreens. An Apple spokesman said: “Apply Pay is designed to be extremely secure and protect a user’s personal information.”

The news is not great for Apple Pay, which launched last year, because it highlights how much damage cyber thieves can create and how valuable card data can be even after merchants secure their payment systems.

Apple has not provided data on how many people are using Apple Pay but have said that the payment service accounted for two out of three dollars spent via mobile payments on three major credit card networks in the US.

In 2013 and 2014 a large number of retailers in the US were hacked putting millions of credit cards at risk. Home Depot was one of the retailers hacked in 2014, a breach which affected 56 million credit cards and 53 million email addresses. Target was hit the hardest, with $162 million in expenses relating to the breach over 2013 and 2014.

Reports suggest that it is unclear exactly what Apple is doing to protect its users from fraud, but banks that are using the payments platform are said to be tightening their security. 

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