It’s hard not to be uneasy about how often data breaches that expose sensitive data like names, addresses, social security numbers, email addresses, and phone numbers make headlines. Whether you use a debit card or a credit card for the purchases you make online or at your favorite brick-and-mortar stores, it seems that sooner or later, someone is going to get their hands on at least some of your personal information.
The shift to EMV terminals isn’t likely to help much. (First of all, it just leaves retailers, instead of banks and credit card companies, liable for fraud if they don’t switch.) And most of the terminals you’ll encounter at the grocery store or at the mall will only require chip-and-signature, not chip-and-pin, which is a much more secure option. And the switch to EMV terminals won’t fix the major problem of fraud that occurs on the Internet, as criminals target online merchants when things get tricker at brick-and-mortar stores.
So what can you do? Pat Phelan reports for TechCrunch that a shift to Apple Pay and other tokenized payment systems “is our best hope to stop online fraud.” These systems keep your sensitive data out of merchants’ hands, and away from hackers who have found an easy target in unprepared retailers. But both consumers and retailers have been slow to get on board. So far, Apple Pay accounts for just 1% of all U.S. retail transactions, and Ryan Faas reports for Computerworld that only about 14% of U.S. households have linked a card to the payments system.
Phelan notes that one of the major obstacles that keeps iPhone users — at least those with the compatible iPhone 6 or iPhone 6s — from using Apple Pay is the complicated and inconsistent user experience the system offers. A March study found that two-thirds of consumers who tried Apple Pay ran into issues paying in-store and online, and only 48% decided to use the service again after their first try. Additionally, the SDK that Apple offers to developers results in inconsistencies in the user experience when Apple Pay is used with third-party apps, which gives users another reason to give up and just enter their card number the traditional way instead.
The problem is even more pronounced when you’re using a computer, where Apple Pay isn’t available in the browser, which prevents most online merchants from benefiting from Apple Pay’s enhanced security. Phelan thinks that these issues wouldn’t be a problem if we weren’t so accustomed to swiping our cards at brick-and-mortar stores, or entering all of the data for online purchases — both processes that are “hopelessly insecure.”
Phelan explains that “extra security isn’t enough of a selling point for the average consumer because, in most cases, they’re not liable for any fraudulent transactions that happen using their card or identity.” But even though you don’t have a big financial incentive to change the way you pay for things, you should still consider using a more secure payments system — even if it means bearing with retailers and app providers as they iron out some of the early issues with their systems.
Switching to Apple Pay will make both your data and the entire payments landscape more secure, especially if a large number of users who already have the capable hardware in hand decide to start using the system. After all, as Phelan writes, “Apple Pay is an incredibly secure system that has serious potential to reduce online fraud — but that won’t matter if no one is using it. To stopthe coming surge of fraud, it’s time for all parties to double-down on making secure payment systems work for the consumer.”
More retailers are likely to incentivize the use of Apple Pay and similar systems when they realize that the widespread usage of such apps can dramatically improve security. Expect to see merchants offering discounts and rewards to get you to use Apple Pay. Apple could do more to get the large iPhone user base on board, perhaps by offering the cash back or rewards that we’re used to getting when we shop with major credit cards.