Apple Could be Using Tokenization Tech and NFC in its Upcoming Payment Service

[RaduTyrsina]

The big media event is unfolding tomorrow and besides the much-awaited new iPhone and iWatch, certain new software features, as well as new services, are said to be announced. One of the new services could be a totally new mobile payments system, according to a new report coming from Bank Innovation.

Apple will be utilizing near field communication (NFC) technology and tokenization technology in the new iPhone 6 and iWatch as a part of its payments initiative, according to sources close to Apple and with knowledge of Apple’s plans for its new smartphone.

In addition, Bank Innovation has uncovered Apple patents dating back to 2009 related to the tokenization process, confirming the company’s long-standing interest in tokenization.

Token technology is said to be a favorite amongst financial institutions, as it’s considered to be extremely secure. Instead of transmitting account and credit card numbers, tokenization sends complex codes over the air between devices.

Thus, these codes are only used one time, which means that even if they are intercepted by a third-party with the intent of fraud, it wouldn't help them.

Bank Innovation is citing both inside sources familiar with Apple’s plans and previously-filed patents which cover ‘secure communication between trusted parties’ using a token or certificate authentication method.

Source: Bank Innovation