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Apple Pay, Tokenization And Security: How To Stay Safe With The Wallet Of The Future

Are you an avid user of Apple Pay or a staunch opponent of yet another encroachment of modern technology into our everyday lives?

Wherever you stand, you owe it to yourself to learn how this futuristic payment method works.

Here’s what you need to know about Apple Pay.

Apple Pay blends near-field communication (NFC) and token encryption to let you leave your wallet at home. To use Apple Pay, your phone must be equipped with NFC technology and be linked to a debit or credit card. You can add any payment card – including your Acclaim FCU Credit or Debit card – by following the simple on-screen instructions from Apple’s Passport app. Once your phone is set up with Apple Pay, you can use it to pay for many purchases.

Apple Pay transfers money from customer to vendor via “tokenization.” Tokenization is the use of a non-secure piece of data to stand in for a secure one.

When you make a payment using Apple Pay, the app creates a token – a random series of numbers – corresponding to your account, along with a one-time security key. It transmits that data to the payment terminal, which sends that token to the “token vault,” a secure database that links these tokens to actual accounts. If the security key is correct, the token vault transmits a charge directly to the linked cards and returns a verification of funds to the payment terminal. Since the token vault is hosted at the payment processor, the point-of-sale terminal never sees your card information.

In an ordinary payment, the terminal reads your card information and then transmits it to the payment processor, which then transmits it to your financial institution. This means your information is stored in three different places.

With Apple Pay’s tokenization, though, your information is seen only by the payment processor and your financial institution. This keeps your information more secure while also ensuring Apple has no way of knowing what you’re buying. In an age when privacy is fast becoming a scarce commodity, this is heartening news.

Apple Pay’s tokenization system is an efficient and secure way to pay. You can download the app, link your Acclaim FCU Debit or Credit card, and start leaving your wallet at home!

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