Apple, banks say Apple Pay fraud not widespread

Apple and the big banks aren't too worried about fraud in Apple Pay.

A lot has been going around lately about Apple Pay's susceptibility to fraud. While some are estimating that fraud in the system might be as high as 6% at some banks, both Apple and several of their banking partners say that high levels of fraud aren't a wide-ranging problem, according to CNNMoney:

But CNNMoney spoke to the nation's largest banks, an association of community banks and Apple. The takeaway? This high level of fraud isn't really widespread.

Banks also make this point: Banks get stuck with fraud costs. Yet dozens of small banks are in a long line to join Apple Pay by the end of 2015, according to L. Cary Whaley III, a technology policy expert at Independent Community Bankers of America. Why would they want to join if fraud is truly rampant?

Banks have different processes for loading cards into Apple Pay, and it is the responsibility of the banks to make sure that their processes are secure. Some require a phone conversation, while others require a security code sent to your buy email. Several banks also send you alerts when your card is added to Apple Pay. Any flaws in the system, as we've said before, come about when banks cut corners on the setup process.

Source: CNNMoney; Thanks to Jim for the tip!