Apple is set to use tokenization technology along with near field communication (NFC) to enhance the security of its rumored mobile payment platform, according to a new report by Bank Innovation.
As explained by the site:
Many are familiar with NFC technology, but tokenization may be a different story. Financial institutions — card issuers and networks — prefer token technology because it replaces primary account numbers, those 16-digit card numbers on the front of credit and debit cards. Instead, the tokenization technology uses complex codes that are easily transmittable over the air and between devices, but that are used only once, so even if they are intercepted, are of no use to fraudsters.
Bank Innovation cites insider sources in disclosing Apple’s plans to implement tokenization for mobile payments. In addition, the site claims to have discovered Apple patents from as far back as five years ago that are focused on the process.
The unveiling of both devices are anticipated to be the highlights of Apple’s special media event on Tuesday, Sept. 9.
Ahead of the launch event, Apple have reportedly installed new iBeacon devices and NFC scanners within its stores. Its rumored mobile payment partner retailers, including Nordstrom, Walgreens, CVS, and Disney, have also reportedly upgraded their store equipment to support Apple’s new mobile payment system.