Apple Card Will Make Credit Card Fraud a Lot More Difficult

Apple’s new credit card has a curious security feature that will make it much more challenging to carry out credit card fraud.

The aptly-named Apple Card is a new credit card, built into your iPhone Wallet app, which the company says will help customers live a “healthier” financial lifestyle. The card is designed to replace your traditional credit card and give you perks, such as daily cash. Chief among the benefits is a range of security and privacy features, which Apple says – unlike traditional credit card providers – the company doesn’t know where a customer shopped, what they bought, or how much they paid.

But there’s one feature – a one-time unique dynamic security code – that will make it nearly impossible for anyone to use the credit card to make fraudulent purchases.

That three-digit card verification value – or a CVV – on the back of your credit card is usually your last line of defense if someone steals your credit card number, such as if your card is cloned or skimmed by a dodgy ATM or taken from a website through a phishing attack.

But rotating the security code will increase the difficulty for an attacker to use your card without your permission.

The idea of a dynamic credit card number first came about a few years ago with the Motion Code credit card concept, built by Oberthur Technologies, which included a randomly generating number built into a tiny display on the back of the card. The only downside is if someone steals your physical card.

Since then, other credit card makers – including Mastercard, the issuing payment provider for Apple Card – have worked to integrate biometric solutions instead. By enabling a fingerprint sensor on the card, powered by the card machine into which it is inserted, it was hoped that fraudulent purchases would be impossible. Other credit cards have worked to roll out biometric-powered credit cards. Again – a big letdown was online fraud, which still accounts for a vast proportion of fraud.

Apple Card seems to meld the two things: a virtual credit card with a rotating security code, protected by a biometric, like Touch ID or Face ID in newer devices. Better yet, the company’s debut physical titanium credit card won’t even have a credit card number.

Now, if someone wants to commit fraud, they need to steal your phone and your face or fingerprint.

Like other sensitive data – such as health, financial, and biometric data – any banking and credit card data is stored on the device’s security chip, known as the secure enclave.

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