Apple Pay to the rescue!

Card fraud is a huge problem that generates billions of dollars of losses every year. It affects businesses, banks and consumers alike. It's never convenient to get this call and the subsequent cancelation of the account, but this one was worse than most: my wife was out of town on a business trip and I was on a dog walk.

Luckily, my spouse had a backup card in her purse and could use it for the remainder of her trip. I, on the other hand, didn't have another card—and I was on my way to the market to buy dinner. My fingers were crossed that the meager amount of cash in my pocket would be able to cover the charges.

After picking out some meat, vegetables, and beer, I headed to the checkout line. Worst case, I could do without the alcohol if I went over my cash on-hand.

Of course... I'm also the kind of person who likes to experiment with new technology. And, since I had my iPhone in my pocket, I decided to see what Apple Pay would do with a cancelled credit card.

I held my phone up to the reader and... it worked flawlessly.

At that point, I figured I was just in a lull between the main account closing and the changes propagating to the Apple Pay device account. I had only made the transaction about five minutes after the card was cancelled, after all. Either way, the payment hadn't been declined and I had my beer. Woo-hoo!

Automagically secure

The next morning, however, while going through my email, I saw an automated message from Citicard AAdvantage that explained what had happened the previous evening:

I don't need to do anything further! For any consumer who's experienced card fraud, this is a huge benefit to Apple Pay.

My family buys a lot of goods online. As someone who works at home, it's a lot more convenient to have things delivered: I'm rarely in the car and near a store. Unfortunately, that also means we see fraud a couple of times each year.

When the card number changes, you have to remember all the places you have a card number stored in a website database. Then you have to go to those sites, one by one, and change them all. So you visit the Netflix site, look up a password you use infrequently, and find where to update your payment information. And then do it at Amazon. And then iTunes. And then for your toll road transponder. And then for your pills. And a few more times after that.

There's another subtle thing that happens to merchants when a card number goes bad: Sometimes online databases don't get updated with new information. I've let subscriptions and other recurring payments lapse because I can't be bothered to figure out how to navigate a byzantine website. I'm sure other services have ended because the merchant sent me an email telling me to update my information, and that message ended up in a SPAM folder, never to be seen again.

So when my card provider tells me that I "don't need to do anything further", they're telling me that I get a little extra free time on the weekend to avoid a mind-numbingly repetitive task. Apple Pay, FTW!

Apple Pay-only

This situation also has major ramifications for merchants: I am now actively seeking out businesses that support Apple Pay because it makes my life a lot easier. Everyone I've told about my experience last week has had the same response: "That's awesome!"

The first time you experience this seamless transfer of your accounts with Apple Pay, you're going to want it everywhere you purchase goods and services. That, combined with very positive word-of-mouth, is going to make entering a card number feel very antiquated. And I suspect this change will come about very quickly.

One thing I've noticed about Apple Pay is that it's being adopted quickly by smaller merchants: The pet store down the street started offering it the first month after it was released. They use an iPad connected to a card reader, so I suspect it was easy for them.

Larger merchants will need time to update more complex systems. The most glaring omission during this weekend's "update all the cards" activity was iTunes: Yes, Apple's media marketplace doesn't support its own payment system. It's odd that App Store updates are suspended because of card verification when that same device is already linked to an updated account.

The seeds of change

We're seeing the beginning of a shift in who's inconvenienced by credit card fraud. Previously, the consumer had to deal with the fallout of a cancelled credit card number. Now, it's the merchants who have to update their payment systems.

Apple will almost certainly address the problem of using Apple Pay for iTunes, and smart companies will follow their lead when they realize that the temporary inconvenience of updating their payment collection system will benefit them in the long run. Consumers will learn quickly—as I did—that they don't want to deal with merchants who do things the old way.

At some point, this will have a snowball effect. When the majority of the purchases you make online are done securely with Apple Pay, spotting an instance of credit card fraud will be much easier. You'll know which merchant leaked your information and will never deal with them again. Eventually, a retailer that doesn't accept Apple Pay will be as popular as one who only accepts personal checks.

And from my experiences this past week, it can't happen soon enough.

Craig Hockenberry

Craig has been developing software since the Paleozoic Era and loves to write about new technologies at

  • That's actually fairly impressive. *slow claps for Apple* Google knows why kids love the taste of cinnamon toast crunch. And they're willing to sell it to you.
  • I know articles sometimes need to get out as quickly as possible, but at what expense? "Luckily, my spouse had a backup card in her purse and could use it for the "reminder" of her trip." Really? It just makes you look silly and harder to take seriously...
  • It's an easy typo to miss. Point it out politely and they'll fix it. Or you could be a cunt. Your choice. Google knows why kids love the taste of cinnamon toast crunch. And they're willing to sell it to you.
  • I think that he took choice #2. :)
  • Autocorrect can be annoying, but not to the point of attacking a writer's credibility. "Hard to take seriously" actually applies to your unnecessary comment.
  • Sorry, people who write for a living should be held to a higher standard. It's just unprofessional to publish unedited content, even if it's easy to do so these days.
  • If it's so "Hard to take seriously", then why am I seeing that it's been corrected? It's called constructive criticism. Deal with it.
  • I used to send corrections to Jim Dalrymple and Peter Cohen when they ran the best Mac website on the planet. (They still do, but two sites.) MacCentral. And I could tell they clearly appreciated a quick email rather than my being a pedantic grammar Nazi in the comments.
  • This might just be a Citicard thing because Wells Fargo did not automatically update my card number when I had a similar issue.
  • Chase didn't do it for my wife either. I guess it's up to the banks to support it.
  • Didn't work for Bank of America either.
  • Exactly the same thing happened, when I lost my Amex card here in the UK. new card appeared on apple pay within half an hour of me telling Amex I had lost my card. Impressive Sent from the iMore App
  • I'm m surprised the author says he has to look up passwords to the online merchant sites used to update card information. Craig, aren't you using iCloud Keychain to manage your login credentials? (It's really great and will get further improvements in ios9.)
  • Even better, 1Password. synced to all devices. I'm just a happy customer, and I tell everyone who doesn't have a password manager that they have to give it a try.
  • +1 for 1Password
  • How does Apply Pay do this? I’ve not used it yet (due to still rocking an iPhone 5C, and my bank here in the UK not being a part of the Apple Pay pilot programme) but how does Apple Pay know your new card number? Do they have a direct line of communication with your banks that when you card is cancelled (and a new one issued), that card’s details is sent to Apple Pay and they update the information their side for you?
  • Apple Pay is not an entity, it's basically a transaction process. The actual card information is stored on the financial institution's end. All that's saved on your device, is a unique Device Account Number. All the financial institution needs to do is link the new card number to the D.A.N of the previous card number. When you use Apple Pay, the D.A.N. is sent to the financial institution (after authentication and verification). It then uses that number to determine the real card number / account number. This all happens between your iPhone and the card issuing bank - there's no intermediate Apple Pay processing/data center that needs "updated."
  • I use a 5s and it works with my watch. Just bought breakfast with it. Apple pay doesn't use your card number. That's why it's secure. It has a special number that identifies you. It never sends your real number, and anybody hacking into the data stream won't see it, or how much you spent, or anything else useful to hackers. It's why Visa's CEO called it the most secure payment scheme to date.
  • I hope HSBC (UK) will get it soon! It doesn't seem like it's in the plan but I hope that story will inspire them :)