News

Visa, Chase add Apple Pay capabilities for merchants, customers

October 17, 2014

Visa and Chase both announced this week that its customers and merchants will soon have access to Apple Pay. Starting Oct. 20, iPhone 6 or 6 Plus users will be able to initiate mobile purchases with Apple Pay in stores.

When paying through Apple Pay, the account holder's personal account information, including the 16-digit credit or debit card number, is never stored on the phone or by the merchant. Instead, the technology generates a unique digital account number that is a proxy for the primary card number, and is used to facilitate the payment, according to a news release.

Digital account numbers are device-specific, meaning they are designed to only be used to make purchases with a specific mobile device or phone. If the device is lost or stolen, the digital account number can be disabled without the need to reissue a card.

Chase merchant customers can integrate Apple Pay into their apps using a Chase software development kit that can be downloaded by merchants and developers to facilitate payment transactions for goods and services in apps.

Visa Inc. is also kicking off a national awareness and education effort for both merchants and consumers with more information about chip technology. According to a news release, the campaign includes educational information at the POS and is aimed at ensuring merchants and consumers have the information they need to use and accept chip cards.

"The adoption of chip technology has the potential to virtually eliminate counterfeit fraud when widely adopted, and will help consumers feel more confident about using their payment cards," Ellen Richey, chief enterprise risk officer, Visa Inc., said in a news release. "Moving quickly to adopt technologies like chip cards, and digital account numbers or 'tokens' in place of payment account data, will further protect personal account information by putting it in a form that if stolen, can't be used by criminals."

Gauging merchant, customer knowledge

A study conducted by Visa shows that 84 percent of small- and medium-sized merchants are aware of chip technology and believe it will enhance the security of payments. Only 52 percent of consumers said the same.

Among merchants, 71 percent believe accepting chip technology would benefit their businesses and 39 percent of merchants believe their current card reader is already chip-enabled.

Chip is a card-security technology that's expected to be activated in more than half of US payment cards and large US retailers by the end of next year. Whether using a plastic card, mobile phone, tablet or wearable to make a purchase – embedding a chip within the device adds a digital code necessary for any transaction to be approved. Chip technology cannot be replicated in counterfeit cards.

Other merchant data points include:

• 71 percent of merchants said they are aware of chip technology and believe it will benefit their business;
• 39 percent of merchants believe their current card terminal is chip-enabled;
• 45 percent of merchants were aware of the October 2015 counterfeit fraud liability shift;
• 66 percent of merchants reported either already having chip-enabled card readers or upgrading to chip readers by October 2015;
• When it comes to having sufficient information to feel confident in making the switch to chip card readers, 45 percent of merchants not yet chip-enabled feel they have enough information; 55 percent said they would like more.