Mobile Payment: Security and Issues of Apple Pay Technology

This report provides a comprehensive analysis of Apple Pay, a prominent mobile payment technology. It begins with an abstract and introduction, outlining the research questions and the report's purpose, which is to examine the functionality, components, and associated issues of Apple Pay. The report delves into the technical aspects, explaining how Apple Pay works, including its integration of NFC technology, Touch ID, and secure elements. It also discusses the various components such as the secure element, NFC controller, wallet, and secure enclave. Furthermore, the report addresses the security issues, including potential vulnerabilities and social implications, such as the dependence on technology and the digital divide. Business and political issues are also highlighted. Finally, it concludes with recommendations and a summary of the key findings, offering insights into the future of mobile payments and the importance of addressing the challenges associated with such technologies.

Mobile Payment
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Table of Contents
Abstract.................................................................................................3
Introduction..........................................................................................4
Research questions............................................................................4
Purpose of this report.........................................................................4
Apple Pay.............................................................................................5
Apple Pay components.........................................................................6
Techniques............................................................................................6
Issue and challenges arise from Electronic payment............................8
Security Issue.....................................................................................9
Social issue arises due to lack of technology....................................9
Business issue..................................................................................10
Political issue arises due to presence of Apple Pay technology......10
Recommendation................................................................................11
Conclusion..........................................................................................11
References..........................................................................................12

Abstract
We are living in the 20th century, a new invention of science is
coming day by day, but it also comes with social, ethical and business
problems. New techniques like in Machinery, Biometrics, health
department and payment. These new methodologies come with a
negative effect. In these days we have a number of ways to do
payment in daily life one of them is Apple pay. The main objective of
this report is to observe the use of Apple pay. Few issues have
emerged about Apple pay technology. The security of the technology
and how consumers can use the technology. In this report, I will
discuss Apple pay technology; the components of the technology, the
issues that arises due to the usage of Apple pay technology. As will be
highlighted later in the chapter, Apple pay is an easier way to do
payment from a mobile phone because it comes with new emerging
technology which is NFC technology, touch ID. However, we are
facing problem due to the rapid growth of technology. The ethical
issue will be based on dependency and vulnerability, inequality as
well as privacy. This analysis will show which further steps required
to be taken to identify the problem and how to solve the problem that
particular issue.
Keywords
Electronic payments, Apple pay, Touch Id, social, political and
Financial issue

Mobile Payment
Introduction
Online payments make everyone life easier, anyone can use it
anywhere anytime to do online shopping. Due to the new invention of
science, smartphone became the first choice of people which provide
new functions like mobile payment through Apple pay Android pay.
So, Apple Pay is one of them secure method of payment because it
comes with new security techniques. Furthermore, through apply pay,
the receiver will not receive the customer bank information. So,
consumers feel safe to do payment via apple pay. Furthermore, people
can download the app from the apple store and connect through card
details with banks. They can use it anywhere. Moreover, they do not
need to worry about the loss or damage of card [1].NFC technology is
the root of apple pay, which allows the mobile phone to do payments.
It is a wireless technology which allows two terminals to
communicate with each other. According to Loup ventures about 252
million of iPhone users across the world use Apple Pay Technology.
Munster has highlighted that Apply Pay transactions in the next one
year will jump by 200 percent [2].
Research questions
 How does Apple technology work?
 How can one use Apple technology?
 How secure is the technology secure?
To answer these three questions three major areas will be
highlighted. An overview of Apple pay technology, its components
and issues that arises due to the usage of the technology.
Purpose of this report
In future, the traditional payment will be replaced by E payment or
Mobile payment. It is very vital to protect the payment or the personal
information. Its automatically save the digital receipt of shopping in-

app and send a notification message to the user. The main purpose to
write this report is to make secure our present or future. There is also
some issue, what kind of attention we need to focus in future.
Apple Pay
Basically, Apple Pay is an electronic payment that is required
while shopping from the digital wallet. The users of the technology
needs the new version of the electronic device which comes with NFC
chips like as iPhone 6, 6 plus, above series iPhones and Apple watch,
the latest model of iPad pro. Apple pay works at checkout on
terminals [1]. While using it we just need to set default pin to verify
the account. Customer need to keep near the reader device at checkout
and most important is keep the figure at home button to complete
their transaction. This process only needs 10 seconds. Then it creates
the digital receipts with Unique ID.
Figure 1: Paying with contactless terminal [2]

Apple Pay components
Secure Element: In these days apple industry using certified
chips which are designed based on a Java platform, which is good for
electronic payment.
NFC Controller: The controller controls the communication between
the NFC protocol or router and the software processor of the secure
element.
Wallet: Basically, it is designed for credit and debit card, store cards
and rewards. The user can check the personal information about cards.
It also stores the digital receipts of payment with a unique id.
Secure Enclave: it manages the authentication process on Apple
devices and allows the transaction to approve.
An example of how to use Apple Pay
For example, if the customers want to do payment through
watch then it should unlock, and user needs to click twice on the side
button. Double click process authentication passes the information to
the secure element processor. Then payment process will proceed.
Apple pay servers: it controls the information about the bank details
of the user in the wallet. It is used as the protocol between two
devices to communicate with each other [3].
Techniques
In this section, I will discuss what technologies are used for
while doing payment, how to get access while entering into the secure
building as an identification.
2.1 NFC: It stands for Near field Communication which acts as
Bluetooth in between two devices. This technology is similar to the
(RFID) Radio frequency Identification. It is used to trace the devices
or product in the market. In general terms, it is short range

technology. (Robert 2013, cited 25.20.2016) NFC device works only
4cm of the radius and one device adopts that waves and complete the
transaction. We can say it is a 2-way communication method, one
device act as a reader and another device as a writer.
When two devices (Figure 2) reach close to each other than one
device produces electromagnetic wave and other connect it and
transfer with 13.56-megahertz frequency each other at 212, 424
kilobits per second. This is a really too fast method to transfer any
data like music, contact information between each other.
Figure 2: Electromagnetic field [4]
2.1.1 peer-to-peer mode: it is a protocol of two NFC devices to talk
between each other like sending pictures, songs. Active mode will be
the sender and the passive device will be a reader.
2.1.2 Read/Write mode: it is a one-way communication process. The
active device needs to contact with the passive device to receive the
data. This act as NFC Tag.
2.1.3 Card emulation: It authorizes the NFC devices to use like same
as a smart card in the public transport.

We can use any NFC chip device like a watch, ring, bracelet or
mobile phone to do payment, The NFC controller will change into
card emulation mode, so the NFC controller will not able to do any
transaction. It just acts as a medium between two devices. Then it
sends a request to the bank to do the transaction in real time.
It is launched in 2014 on iPhone 6 and 6 Plus. When customer
want to use the device at any reader device then user need to allow
transaction through biometric fingerprint. The payment deducts
through another separate chip that is secure element.
. NFC technique make customers life easier to share any kind of
information between one device to another device without fear of
lose.
Issue and challenges arise from Electronic payment
Lack of usability: Some people do not believe to do payment from
apple pay due to lack of knowledge or lack of understanding of
technical knowledge. some of them are not aware of the English
language yet it is the language that has been employed by Apple. This
is one of the reasons as to why lots of people still prefer payment
from card [5].
Lack of security: online payment over the internet is not fully secure
because the hackers can easily steal the information of the customers
and steal money as well. While shopping customers need to do
payment through apple pay. So, the retailer can get the information
about name, sir name, address. Sometimes, a hacker can hack the
information through name and contact number. Card data security is
also of great concern. The common arena that surrounds card security
includes; maintaining of an information security policy and the
implementation of a strong access control measures. Protecting of
card-holder data is also of major concern.
Lack of trust: we are listening the everyday story of fraud and misuse
of payment. Some customers do not believe in electronic payment due
to risk. This results to lack of trust of E-payment technology.
Cross-border transactions: Even though E-payment such as Apple pay
plays an important role in global trade, at times cross-border
transactions using E-payment can be expensive, slow, and inefficient.

Some of the national banking infrastructures are unable to handle
some of the current developing technologies such as Apple pay
Security Issue
Apple pay is designed to provide security mechanisms, but it
does not provide private and legal security. Apple devices do not need
to store the information about the bank details of customers the
application always use the different identification number. This
unique identification number is fully different than credit and debit
card details. The application device always asks authentication from
user to store the information about payment method details.
Biometric authentication is the emerging technology in E-
payment system. Apply pay require biometric authentication means;
Touch ID to do payment process. In general life, we are leaving a
fingerprint in many places. An attacker can use Apple consumers’
fingerprints anywhere if Apple’s customer loses their phone. The
attacker can then use the consumer’s iphone to create fake fingerprints
anywhere to unlock the device and later pay for their shopping
through apple pay.
Another security issue related to Apple pay is the issue of credit
cards. Some computer security professionals have indicated that it is
very easy to come up with credit card numbers used in Apple pay if
the attacker is aware which end if the dark web to look in. According
to Forbes, the going rate of credit card is said to the range of $2. In
addition, thieves can enter a stolen card into the Apple pay meaning
that a thief can go into a store and purchase an item.
Social issue arises due to lack of technology
The main purpose of electronic payment is saving the time and
to so secure payment. Due to NFC technology through Apple pay, the
merchant cannot able to receive the card details. The retailer can use
only the location of shopping, name and email.
One of the social issues that arise with Apple pay technology is
the when the battery runs out of power. This means that customers are
unable to carry out the day to day business. It is a problem that the
company that owns iPhone 6 knows too well. This means that Apple

pay is not a viable solution and there was no need for the company to
eliminate credit cards. In addition, the technology requires one to buy
a new iPad or iPhone over the current Android which in fact uses
Google wallet which is one of the competing partner [6].
Business issue
The implementation of Apple pay technology effect the
international business scenario as well. Every organization have to
pay money for buying goods. So, some of organization has changed
their payment system because they are not using apply pay method.
On other side organization need to buy apple devise or buy payment
readable devices. They have to spend too much money on it.
According to two professors from Harvard Business School,
they are of the view that the Cupertino Company will have a
challenge when coming up with a compelling message of driving their
sales of service which allows the company to pay their retail counter
with only a swipe of an iPhone. Benjamin Edelman, who is an
associate professor was of the view that Apple will be required to
work ahead in convincing potentially and thoughtful organizational
customers. This is so because the current technology is working
properly and customers are not complaining. In fact, most of the
customers have already accepted the card technology as it gives an
addition of one to two percent off the purchase price. This means that
the organization has what Harvard business professionals call chicken
and egg game to solve; Apple consumers will not use the Apple pay
service it is in use in a number of stores. This means that the
organization needs to first convince its Merchant to adopt the
technology so that their consumers can follow [7].
Political issue arises due to presence of Apple Pay technology
The political issue arise due to presence of technology has been
increasing in these days. Apple industry gain new technologies and
also gain political power from it. NFC technology promote Apple pay
which is using everywhere to buy or sell something through iPhone as
well as watches. Apple industry is thinking new technology like how

the customers get more addicted of apple devise, people just attract
toward iPhone not an android device.
Apple pay is can be more useful in the eco system. According to
Irwin, shopping through credit card is not bad thing but most people
keep it as backup everywhere. In these days, the apple pay is the
advance effective way to do payment [8].
Recommendation
Apple organization need to focus on IOS design software which
comes with vulnerabilities in these days. So, the latest version of IOS
software is coming day by day. Due to those vulnerabilities, a hacker
can easily hack that software to collect the personal information about
customers.
Conclusion
From this report, it is evident that Apple Pay technology is
booming. In fact, almost a third of iPhone users use phones as their
wallet. With increasing usage of the technology, it has come with
some issues. This report has classified the problems into three which
are social issues, business issues, and political issues. Social issues
that come with Apple technology are related to security. As we can
see from the report, Apple pay technology is not secure. The business
issue that has been highlighted in the report is the issue of cost and
chicken and game issue. Lastly, from this report, it is evident that
Apple pay technology has resulted in the company gaining political
power.

References
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booming-claims-new-report/. [Accessed 14th September 2018].
[3] N.K.Ratha, J. connell and S.Pankanti, "Big Data Approach to
bimetric-based identity analytics," IBM journal of Researcg and
Development , vol. 59, no. 2, 2015.
[4] C. Xinru, "INFORMATION SECURITY OF APPLE PAY," Oulu
University of Applied Sciences, 2016.
[5] S. Nambiar, CT.LU, Connell and L.RLiang, "Analysis of Payment
transaction security in mobile commerce," Informationa Reuse
and Intergration: Proceedings of the 2004 IEEE International
Confrence , pp. 475-480, 2004.
[6] M. Swider, "Apple Pay," Techradar, 20 November 2015. [Online].
Available: https://www.techradar.com/reviews/phones/mobile-
phone-accessories/apple-pay-1264966/review/2. [Accessed 14th
September 2018].
[7] D. Gerdeman, "Apple Pay’s Technology Adoption Problem,"
Havard Business School, 14th October 2014. [Online]. Available:
https://hbswk.hbs.edu/item/apple-pays-technology-adoption-
problem. [Accessed 14th September 2018].
[8] "What's the problem for which Apple Pay is the solution?," The
Los Angeles Times , 10 September 2014. [Online]. Available:
http://www.latimes.com/business/hiltzik/la-fi-mh-whats-the-
problem-20140910-column.html#%20irwin. [Accessed 12th
September 2018].