The CEO of Apple (AAPL, Financial), Tim Cook has declared that the American government would accept transactions through Apple’s mobile payment system, Apple Pay. Cook spoke at the Cyber Security and Consumer Protection Summit at Stanford University in Palo Alto, California. The summit was attended by President Barack Obama as well. He spoke about Apple Pay which has successfully built a trustworthy image in the eyes of the US government, making them consider the usage of Apple Pay for various transactions like admission fees for US national parks, etc.
The deal includes the Direct Express payment system and government cards issued through GSA SmartPay, which deals with more than 87.4 million transactions which are worth $26.4 billion per year, according to the reports of General Services Administration.
Dealing with PAN-OPTICISM
Cook took advantage of the opportunity and also talked about company’s mobile payment system’s take on privacy and security. Apple Pay users do not have to worry about any kind of tampering with their privacy and security, as the company does not keep a track of all transactions or record any information related to the consumers’ activity of their credit cards. The copy of the credit card number won’t be received by anyone including the merchants. With this added security feature the credit cards have become safer than ever. “We have a straightforward business model that does not include selling personal data,” Mr.Cook told the audience. “History has shown us that sacrificing our right to privacy can have dire consequences. We still live in a world where all people are not treated equally, too many people do not feel free to practice their religion or express their opinion or love who they choose—a world in which that information can make the difference between life and death.”
In a way, the company also criticized its prime competitor Google Inc. (GOOG, Financial). Google is currently facing a ruling from the EU court regarding privacy matters. Google utilizes the information of the users and other personal data for audience targeted advertisements. In September 2014, Tim highlighted the special feature of Apple’s new iOS 8, that it completely prevents the companies to have access to any sort of information related to the users, be it private messages, photos, emails or call log.
This attracted criticism from James Comey, director of the Federal Bureau of Investigation. “What concerns me about this is companies marketing something expressly to allow people to place themselves beyond the law,” he said in September. Later Mr. Comey said that “companies like Apple should come forward to build surveillance capabilities into their products to help enforcement of law.”
Conclusion
US consumers have started using cards with a chip embedded in it, known as EMV technology. Due to this, the criminals are expected to shift their activities online and to cell phones. This is the reason that banks, card networks and retailers are working towards adopting tokenization.
While Apple is facing criticism from law enforcement officials about excessive security, other parts of the US government have been raising questions whether the company has sufficient safeguards over user information. With the shipping of smart-watches in the news the government has shown concern over the health data collection by the company. Bottom line is even though the Apple pay has been at the receiving end from the feds however its focus towards consumer data security drives it to be one of the most favored mobile payment systems across the world.
