Data Communication Security: Apple Pay and PayPal Detailed Report

This report provides an analysis of security and applications in data communication, focusing on Apple Pay and PayPal. It discusses the security measures implemented by Apple Pay, including the use of Secure Element and encryption, and how it addresses issues related to payment card security and transaction speed. It also examines PayPal's security features, such as SSL protocol and firewalls, and compares the advantages and disadvantages of both systems. Additionally, the report addresses TCP protocol aspects like sequence numbers, port numbers, and acknowledgement processes in data transmission. The document concludes by highlighting Apple's potential to set the standard for mobile wallet systems and emphasizes the importance of security in online payment methods. Desklib offers this report along with numerous other resources for students.

Running head: DATA COMMUNICATION
Data Communication
Name of the Student:
Name of the University:
Author Note

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DATA COMMUNICATION
Security and Applications
The Target payment card breach was a huge turning point in the payment card industry.
Up to this point all parties of the payments ecosystem had very little motivation to change the
way they processed payment cards. For the discussion on the topic of security in the online
wallets two organization have been selected which are Apple Pay and Pay Pal. The Apple Pay is
a wallet selected for the Apple device which runs on the iOS platform and the PayPal is used in
the android devices. A brief description about both the wallets and the encryption used in them
have been discussed in this paper. The authentication functions are also described additionally
and a brief comparison in between both the devices have been provided here.
There will be a great deal written and to be said about Apple Pay. Many even astute
experts will assume that Apple just took a year or so to build this new payment system. Apple
developed an elegant solution. By securing a payment card in the iOS device inside the Secure
Element and passing the payment card in an encrypted manner, three massive issues of retail
payments are resolved:
 Payment cards are always secured
 Payment card date is always current
 Payment card transactions will be faster than card swipes
The system implemented by Apple was later adopted by both Visa and MasterCard.
However, the first step was to negotiate a way that the Secure Element, controlled by the cellular
carriers could be replaced by the Apple Pay system. These systems form the foundation of the
way Apple Pay operates. This system was originally just related to NFC but Apple has extended
its use cases for App purchases.

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The loading of a payment card is simple. The user can associate their payment card on
file at iTunes or you just take a picture of the card and will be encrypted into the secure element.
Apple will verify that card is valid and the authorized user. At this point 85% of US payment
cards are compatible with the Host Card Emulation/Secure Element Apple is using. The other
aspect of Apple Pay is inside of Apps. Apple has created an API that allows merchants to
receive a onetime use payment card number in a very secure manner and also pass on
demographic information with permission, including address. Stripe has been a valuable Apple
partner and was granted early access to the Apple Pay system. The results are Stripe has created
a beautiful and elegant API that allows App developers fast and easy access to Apple Pay. Apple
does not process any payments, Apple does not issue any payment cards, Apple will be a
facilitator to the existing system and in the process improve it and change it in a remarkable way.
Apple will securely hold the payment card, tokenizes it and use various technologies to pass it on
safely during a transaction.
PayPal Holdings, Inc. is an American company operating a worldwide online payments
system. Online money transfers serve as electronic alternatives to traditional paper methods like
checks and money orders. To integrate the PayPal payment gateway, the user doesn’t need a
merchant account, which saves time and money. If user is undecided about a hosted or integrated
gateway - PayPal offers both options, depending on the plan you choose. Both PayPal Payments
Advanced and Pro accounts allow payments to be processed directly on your website. PayPal
Payments Standard is free and redirects users to PayPal’s page to enter their payment details.
PayPal’s website is secure and encrypted. As long as the user have a secure connection to
the legitimate PayPal site, any information exchange is hidden from prying eyes. PayPal uses all
of the same security features that you’d expect from any large financial institution. The PayPal

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site is extremely secure. Industry-leading technology (SSL) is used to keep each and every
information safe. The confidential information is encrypted automatically by PayPal; when in
transit from the computer to the PayPal sever. Secure Sockets Layer protocol (SSL) comprising
of an encryption key length (128-bits) is employed in the technology. Prior to even registering or
logging in to the PayPal site, PayPal server checks and verifies that user is using an approved
browser (SSL 3.0 or higher). As soon as the information reaches the PayPal site, it automatically
resides on a heavily guarded electronic server. Being one of its unique kinds, PayPal servers sit
behind an electronic firewall that is not openly connected to the internet. Hence, the private and
confidential information is available only to approved computers.
Apple has an advantage, because customers will still get their points. They will be using
the same payment method, just in a new, presumably more convenient, way. Standardizing the
POS to accept new payments across merchants is tough. Currently there are 220k merchant
locations (including Apple stores!) that accept NFC. Payments is a low margin, high POS
business that requires a lot of volume to scale and make sense. PayPal hides payment details
from suppliers, and buyers like it that way. Apple will hide payment data from merchants, which
can be a selling point. On the wallet side PayPal, through their Discover Card relationship will be
able to be used with some adjustments. The PayPal wallet will become less and less useful.
There is little doubt that Apple will set the standard for other device companies and there will be
a great deal of emulation of Apple’s processes. This will prove to be very difficult. However
similar wallet systems will be presented and it is likely that PayPal may try to lead this
enterprise. The end result is Apple will make all other mobile wallet systems look clumsy that
came before.

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TCP
a) In the second segment from Host A to B, the sequence number is 207, source port number is
302 and destination port number is 80.
b) If the first segment arrives before the second, in the acknowledgement of the first arriving
segment, the acknowledgement number is 207, the source port number is 80 and the
destination port number is 302.
c) If the second segment arrives before the first segment, in the acknowledgement of the first
arriving segment, the acknowledgement number is 127, indicating that it is still waiting for bytes
127 and onwards.

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d)

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