Federal Gov’t to Support Apple Pay; MasterCard and Visa Beefing Up Security Efforts (Feb. 17, 2015)
The U.S. government is the latest to get behind Apple Pay as part of its commitment to encourage more secure payments technologies, the White House announced during its Summit on Cybersecurity and Consumer Protection at Stanford University on Feb. 13. Apple Pay will become available for users of MasterCard-branded Direct Express cards issued by Comerica Bank and cards that are part of the GSA SmartPay program issued by U.S. Bank.
No target date was given for integrating federal payment cards with Apple Pay, which would affect about 5 million citizens who receive Social Security or veterans benefits on the cards, and about 3 million SmartPay government purchasing cards. Among consumers 65 years or older who typically receive Social Security benefits, it’s estimated only about 1 in 11 have the iPhone 6 model currently required to use Apple Pay. But another government link to Apple Pay could have more widespread impact. Apple CEO Tim Cook announced at the summit that the federal government will begin accepting Apple Pay at its national parks this fall.
In conjunction with the summit, MasterCard announced plans to invest $20 million in new security technologies. MasterCard later this year will pilot technologies that use a combination of biometrics, facial and voice recognition, and fingerprint-matching to authenticate and verify transactions. MasterCard also said it plans to roll out this spring MasterCard Safety Net, a new product to independently monitor and block specific transactions based on certain risk factors.
During the summit Visa also announced plans to expand its Visa Token Service, introduced last fall with Apple Pay, which prevents exposure of sensitive customer data by substituting credit card numbers with randomly generated tokens for each transaction. Other device manufacturers and technology companies will begin using the service this year through phones and tablets. In addition, Visa plans to extend its tokenization service to transactions initiated online with Visa Checkout.
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