As part of Apple's grand plan to change the way we shop, the company is reportedly set to introduce a new kind of mobile payments technology with the iPhone 6, which will make credit-card transactions far more secure.
The iPhone 6, expected to be announced Tuesday, will incorporate tokenization technology, according to a report from Bank Innovation, which cites sources close to Apple. The technology scrambles credit- and debit-card details so that the information is used only once.
Tokenization works by substituting a randomized string of characters for the actual card details, meaning that retailers don't store card numbers, expiration dates, or other card information. Instead, the information is stored in a "virtual vault" system. If stores using tokenization are targeted, hackers won't gain the actual card information, but instead the useless scrambled data.
The Bank Innovation report also uncovers patents filed in 2009 that show Apple has been considering introducing tokenization technology for some time.
Both Visa and Mastercard, rumored partners for Apple's mobile payment system, already offer tokenization technology to retailers, The Wall Street Journal reports. It's unclear whether Apple will handle tokenization itself, or if the issuing banks will continue to manage the system.
The Journal reported earlier this month on a wave of businesses wishing to adopt tokenization technology. Companies that store card data for lengthy periods of time because they deal in recurring payments (such as gyms) are prime opportunities for card companies using tokenization.
Separately, many anticipate that Apple will be integrating Near Field Communication technology into the iPhone 6 as an important part of its mobile payment platform.
Culled from: http://www.businessinsider.com
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