ApplePay is considered one of the most secure payment tools today. But that didn’t prevent hackers from finding a way to drain users’ bank accounts using the system.

According to UK researchers, fraudsters have discovered a security flaw in Apple Pay that allows them to make contactless payments from someone else’s iPhone.

Members of the group from the University of Birmingham and the University of Surrey published a paper describing how hackers exploit security flaws.

What is ApplePay?

ApplePay is Apple’s official payment service, integrated with the iPhone (iOS) and the company’s other devices.

The platform is compatible with credit and debit cards from many banking institutions worldwide with the proposal to facilitate purchases.

Through the digital wallet application, it’s possible to make payments in stores, restaurants, and other establishments only with Touch ID or Face ID authentication, without needing your physical card.

In addition to using your iPhone or Apple Watch to make physical payments, Apple Pay is also compatible with numerous apps and websites, making things easier even for those using an iPad or Mac.

The Dangers of Using Tap and Pay Apps

But even with so many security measures, there are still risks, mainly because of the system’s popularity.

It is increasingly common to see people using Apple Pay for payment, from retail purchases to paying for public transport.

The reason for this popularity is simple: convenience.

Digital wallets mean people no longer have to leave the house with credit cards or cash. Instead, everything they need to make a purchase is already built into their mobile devices.

But this convenience is also its biggest weakness. Despite being one of the safest payment methods, fraudsters exploited some shortcomings.

We’ll see more about that below.

How Did Hackers Drain Bank Accounts Using Apple Pay Apps

According to the researchers, the hackers managed to drain Apple Pay users’ bank accounts thanks to Express Transit’s feature.

Apple first introduced the tool in iOS 12.3; with it, users can quickly pay for public transport trips with a digital wallet app.

But it doesn’t need to validate those transactions with Face ID, Touch ID, or a password. And with that convenience came the security flaw.

Hackers Use Express Transmit to Steal Money From Accounts

As the researchers explain, transport ticket readers, for example, transmit a non-standard sequence of bytes that can bypass the iPhone lock screen.

By mimicking a ticket reader, the researchers could trick Apple Pay into processing contactless payments — even if they only managed to do that with Visa cards.

The researchers used a reader to make fraudulent payments of any amount from a locked iPhone. They tested up to £1000.

In other words, it would be possible for hackers to use it in any other establishment and transfer the money directly to their accounts.

Likewise, the researchers warn that an attacker who steals a locked iPhone can use a stored Visa card to make contactless payments worth thousands of dollars without unlocking the phone.

But attacks are more complicated than that; The researchers explain that specific signals need to be set.

Hackers must modify some bits to allow offline data authentication for online transactions used on readers that may have intermittent connectivity (e.g., transit system entries).

What do Apple and Visa Say About These Attacks?

These attacks are only possible because of the security flaws between Apple and Visa systems. Therefore, they already recognize how serious the problem is. However, they still haven’t agreed on which one should fix the issue.

Apple said that this is a problem with the Visa system. Still, Visa representatives don’t believe this type of fraud occurs due to the multiple layers of security that exist and ensure that Visa’s zero liability policy protects users in the event of an unauthorized payment.

Visa added that their cards connected to mobile wallets are secure – and cardholders should continue to use them as usual. Visa said they take all security threats seriously and constantly develop features to protect cardholders.

What To Do if a Hacker Stole Your Money Using Apple Pay

As much as Apple guarantees the security of those who use Apple Pay, there are proven flaws in the system that hackers can target to drain users’ bank accounts.

If you had money taken from your account, here’s what you can do:

• Contact your bank account manager right away and explain what happened;
• Contact your credit card issuer and ask them to block and deny any future transactions;
• Report to the police with as much information as possible (take screenshots, save any phone messages and receipts);
• Get back to your bank account manager with the police file report in your hands and open a dispute against any illegal transactions made in your name.

Note that those steps above can change in a case-by-case scenario. For example, if your bank is fully digital, you must contact their support over the phone or by email.

In addition, you can call the bank or the card issuer and request the suspension of Apple Pay prepaid debit and credit cards. They will have to refund the amount that was improperly spent (as long as the evidence points out that you’ve been hacked).

Precautions to Prevent Hackers From Draining Your Accounts Using Apple Pay

Big tech companies like Apple take security very seriously. They even pay hackers to find bugs and security breaches.

But still, it’s possible to have your iPhone hacked by fraudsters. And that is why you must do everything you can to prevent that. For example:

• Keep apps hidden inside password-protected folders;
• Never store your passwords on the device;
• Activate “Find iPhone” because if your device is lost, it can put Apple Pay in lost mode and cancel the cards immediately;
• Turn on biometric authentication such as fingerprint or facial recognition to add an extra layer of protection;
• Keep your iOS system constantly updated;
• Use a password manager app.

In the case of the Apple Pay app, it does not store your payment data and uses built-in security features. In addition, you need to set a code on the device, which can be Face ID or Touch ID.

Many stores today are developing technology or even applications that use two-factor authentication.

Such features add extra security layers, as the user needs to provide another way of authentication other than the password.

Security at The Time of Purchase

Yes, iPhones and iOS are exceptionally secure – but not unhackable. They’ve had their fair share of security exploits in the past and suffered some pretty big safety breaches.

But since most services offer an iOS app, your iPhone is just another point of contact for everything from your bank account to your cloud storage.

So, if you do your best to implement better iOS protection (and overall, be smart and understand how fraud happens), your data and accounts will be more secure in case your phone gets hacked.

#iphonehack, #applehack

Payments aren’t just about money. The payment system is an evolutionary process within the context of human history. From its beginnings in ancient times to the latest era of digitalization, it has taken several shapes and been altered to adapt to the state of technology.

Walking through the methods that we’ve used to conduct transactions in the economy can provide a variety of possibilities to gain unique insights on the payment system as it has evolved over the centuries.

Barter and Non-monetary Transactions

Bartering was common prior to the invention of coins and banknotes. People did not purchase or sell using money in ancient times.

Instead, they exchange goods or products for what they desire or need from others. Barter is the exchange of goods or services. Bartering is conducted at random and directly.

Clearly, this way of creating transactions has some major limitations. With greater levels of economic specialization, more payment methods were needed.

Metal Coins

The advancement of society necessitates the development of a more stable and efficient transaction technique. Many civilizations eventually opted to use coins, the value of which was determined by the value of the material used to make it.

Around 600 BC, the Lydians, a kingdom associated with ancient Greece and located in modern-day Turkey, issued the world’s first coins.

Because these materials are quite hard and may be used to manufacture weapons, the first coins were made of copper, then later of iron. Coins were also made from gold and silver in ancient civilizations.

Coins are incredibly convenient since they can be measured rather than weighed. Metal is a reliable and efficient form of currency. It had a significant impact on the purchasing and selling of items in the ancient world – and helped to maintain price levels.

Gold and Silver

Gold is both a precious metal and a global monetary regime. Gold has accompanied humankind throughout its history, playing an essential role in the political, economic, and social development.

Lydia is also the origin of the first gold coins.

Since then, gold coins have steadily evolved in Mediterranean civilizations and traveled across many other countries. Its unique qualities, including oxidation resistance, tarnish resistance, malleability, and ease of casting, make gold ideal for monetary purposes.

Gold, together with silver, was the basis of the monetary system for most of human history. Traditionally, Silver was generally used for internal transactions, whereas gold was used for foreign transactions. 

England became the first country to establish the gold standard system in 1816, and the system underwent a lengthy transition period before being implemented in 1821.

Paper Money

Paper money’s origins are uncertain. While it originated in China during the Northern Song Dynasty, legend has it that its basic forms may be found in various regions of the world dating back to the very beginnings of human history.

Chinese paper money, or banknotes, were been in use since the Tang Dynasty in the 7th century. At that time, China’s main currency system consisted of round and square coins, as well as gold and silver coins.

Chinese banknotes were widely used across a vast area, and the country had a fairly complete banking system.

However, these banknotes are merely “checks,” and they did not entirely replace metal coins in everyday life. The notes were only disseminated among a privileged class of merchants and aristocrats due to their high value.

Due to political restraints, Chinese paper money was not able to expand beyond the Chinese mainland. The Ming dynasty implemented several efforts to restrict paper money and closed many financial establishments in 1455.

Since then, private Chinese banknotes have vanished.

Gold-Backed U.S. Dollar

After several failed attempts employing multiple exchange techniques, the United States began using gold as a basis for valuing its currency – the legendary US Dollars – in 1879, essentially returning the country to a gold standard.

From 1879 through 1933, the United States government would pay its bills in gold, issue dollars as redeemable paper money, redeem the currency to fulfill the country’s gold demands, and, most significantly, recognize paper money as legal tender.

During this time period, one ounce of gold was worth $20.67. The government issued treasury notes and national banknotes in the 1890s based on this value.

At this time national banknotes were backed by gold reserves, and were redeemable in gold or other legal tender notes. Treasury notes had legal tender status but were recalled and terminated after The Gold Standard Act of 1900, which recognized gold as the only commodity eligible for redeeming paper currency.

To meet the monetary demands of banks’ clients, the Federal Reserve notes, which could be enlarged or contracted in large quantities, were developed in 1913. It had no effect on the gold standard, however, because the US dollar was still defined in terms of gold.

President Richard Nixon stated in 1971 that the United States will abandon the gold standard, allowing the US dollar to be freely traded on global exchanges. This was a result of US spending on war in Vietnam, and had a massive impact on the global financial system.

U.S Dollar

The United States Mint issued the first dollar coins in 1792, which resembled the Spanish dollar coins made in Mexico and Peru.

The introduction of US dollar coins was marked by the Coinage Act of 1857, which resulted in the removal of the Spanish dollar, Mexican peso, and many British-originated currencies from the circulation of legal currency in the country.

Following the demands to fund the Civil War, the first batch of US dollar notes was issued in 1861. Later, in 1862, the United States government issued United States notes (known as legal tender), and in 1869, it established a standardized printing system for the notes.

The United States dollar was acknowledged as the world currency beginning in 1944. It would go on to become the world’s most dominating currency, which it still is today.

The current printed notes are $1, $2, $5, $10, $20, $50, and $100, after the production and printing of notes greater than $100 was formally halted in 1969. Except for the $1 and the newly-published $100 bill, the Bureau of Engraving and Printing planned to redesign each dollar after 2004.

A number of coins were also created, with the most common and widely used being one cent, five cents, ten cents, twenty cents, and fifty cents.

Credit Cards

Lewis Mandell writes in “Credit Card Industry: A History” that the notion of a credit card sprang from agrarian life where farmers had to find a means to defer payment of seeds, animals and supplies during planting season and pay later. This was the start of the history that would shape today’s credit cards.

Cuneiform was used to record transactions on clay tablets 5,000 years ago. Notably, debtors could be prevented by erasing counts and records.

Credit coins emerged after the US Civil War. The aim was to stamp an image and a customer account number on the coins. After a coin’s owner purchased a product, a merchant would evaluate the credit limit and authorize or deny it based on the account number’s paper file.

In 1914, Western Union launched metal cards dubbed “metal money” as an early version of the credit card.

When a banker called John Biggins debuted “Charg-It” cards (the first and closest form of a modern credit card) in 1946, they only worked with local establishments within a two-block radius.

Forrest Parry, an IBM engineer, invented the magnetic stripe in the 1960s. This cutting-edge technology is used in today’s credit cards from VISA, Mastercard, etc. Today, people use credit and debit cards instead of cash. This trend is set to grow, but not without some challenges.

Mobile Payments

In 1997, Coca-Cola introduced an SMS vending machine in Helsinki, Finland. Around the same time, Mobil introduced Speedpass, a device that allowed customers to pay for gas by placing it near or on a sensor on the pump.

But the two SMS-based mobile payment systems had a limitation: they could only accept tiny amounts (known as micropayments). In 1997, Finland’s Merita bank launched the world’s first phone-based banking service.

Since then, mobile payment systems have been steadily developing. By 1999 and 2001, people would be able to buy movie tickets and pizzas using their cell phones. A major mobile payment system from Vodafone was launched in 2007.

Customers could make micro and macro payments using USSD/SMS.

Of course, with easier ways to pay came more fraud. Companies like Securter are creating tools that will make digital payments easier, and protect the legacy credit card system, which still has a lot of utility.

It is expected that as technology advances and new ways by financial institutions and fintech companies emerge, the power and promise of mobile payments will be unlocked on a larger scale.

 

References:

https://squareup.com/us/en/townsquare/history-of-money-and-payments

 

The world may change, but credit card  fraud remains popular among scammers. Anyone can become a victim of credit card fraud at some point in their lives. There are ways to stay safe – even if you are in a high-risk group.

Financial services are primary targets in the domain of fraud, not only because they provide a substantial source of profit, but also because they represent a challenging way to gain an illegal income.

In the era of technology, credit cards are no longer strange to many people because of the many benefits they bring. However, as modern banking systems evolve, high-tech thieves employ increasingly complex fraud techniques.

While fraud targeting financial services is the game of innovative thieves, frauds targeting every single individual are the game of both innovation and psychology.

According to data from The Motley Fool’s The Ascent, more than 35% of American consumers have been victims of credit card scammers. The report also looks at age groups, with baby boomers topping the list with 42.6%, followed by millennials and generation X with 33.1% and 37.6%, respectively.

The older you are, the more likely you are to fall victim to credit card scammers. In fact, when it comes to credit card fraud, the elderly are typically the ideal prey.

Seniors and the elderly are considered soft prey. They are generally easy targets as they are more cooperative than younger people. It’s time to break down key reasons why credit card fraudsters target senior citizens and what families can do to protect their loved ones.

 

Why Are Senior Citizens Always Targeted By Credit Card Fraudsters?

With the proliferation of digital networking tools, people’s ability to capture and update information is mostly determined by their level of technological literacy. However, the majority of middle-aged and older adults lack this strength. Their credulity can make them easy targets for con artists.

Lack of Familiarity With Tech Terminology

Furthermore, the regular leaking of personal details in the digital world nowadays gives crooks an advantage to acquire an individual’s full name, date of birth, address, occupation, and place of residence. They might then create a fictitious scenario to entice or scare the victim into transferring money or providing personal as well as financial details.

Better Credit Score

According to leading credit card company American Express, the average credit score is higher in the older age group. A good credit-score portfolio is a fraudster’s favorite metric when looking for a victim.

Fraudsters can impersonate a bank employee or other reputable organizations in order to approach consumers, acquire security information, and steal money from their accounts and credit cards by offering to withdraw money from credit cards.

Approaches might be made via a phone call, text message, or even in person.

The most prevalent is that they pretend your account is in trouble and urge you to share or offer personal information such as an OTP code, a card number, a PIN code, a CVV number, a login name, an access password, a security question, and other card-related information.

Trouble Remembering, Detecting, and Reporting

According to medical experts, in addition to having trouble verifying information, the elderly have impaired judgment of situations and memory, and they easily forget what happened. Having said that, it is common for someone to be unaware that they have been a victim of credit card fraud.

Not all senior citizens have memory problems, although it is a common occurrence. Furthermore, even after detecting the scam, some people are embarrassed to disclose the incident. The more they remain silent, the more opportunity the rooks have. Unfortunately, scammers have picked up on this mindset and exploited the vulnerability.

How To Protect Your Elderly Relatives From Credit Card Frauds

Be Open to Talk about Touchy Topics

It is critical to be willing to discuss touchy subjects (in this situation, credit card fraud). Proper communication can help senior citizens be less sensitive and self-pitying, as well as safeguard them in the future if they are scammed. You can convey gentle warnings about scams through talks so that people are aware when similar indications appear.

Regular Check and Update

The simplest is regularly helping parents and grandparents in checking and updating phone software, teaching how to go online, playing safe social networks, and sharing cautionary anecdotes when getting calls from strangers. On the contrary, a lack of awareness and attention always exposes the elderly to a variety of dangers, not just frauds.

Use Financial Software Solutions For Additional Security

Credit card fraud is becoming more complex as tech-savvy crooks seek to amass a fortune by obtaining the personal and financial information of credit card customers. Because individual efforts cannot adequately solve the fears, it is always feasible to add a security system to increase the layer of safety, particularly when it comes to shopping.

There are only a few networks that can meet the demands. Securter, for example, is a one-stop safe system that eliminates human credit card entry to protect online transactions from hackers, fraud, and unauthorized card payments.

Unlike other online payment security systems, Securter is focused on the protection of both merchants and consumers.

The people who are developing the platform understand the issues that elderly persons face with new technology, so the team makes it as easy as possible to stay safe. With new tools, the future of credit card security should improve, and empower legitimate uses of the technology.

 

https://dataprot.net/statistics/credit-card-fraud-statistics/#:~:text=130%2C928%20credit%20card%20fraud%20reports,the%20United%20States%20in%202018.&text=About%2040%25%20of%20the%20reports,requests%20for%20creating%20new%20accounts.

https://www.fool.com/the-ascent/research/identity-theft-credit-card-fraud-statistics/

https://www.americanexpress.com/en-us/credit-cards/credit-intel/credit-score-by-age-state/

Credit cards play a significant role in making purchases for almost everyone. But innovation has two sides.

Phishing scams happen all the time despite the fact that numerous cases have been reported. Phishers have no difficulty keeping up with new technology, learning from it and spotting its weaknesses. That explains why credit card fraud and identity theft are on the rise. In 2020, the United States suffered credit card fraud losses of $11 billion, which equated to a real-world loss of $39.6 billion.

There are various ways that criminals can commit credit card fraud, from digital to low-tech methods. The 3 most common types are card not present fraud, stolen card fraud, and false application fraud. It’s critical to understand how these popular frauds operate to protect your personal and financial information against being taken advantage of.

Card-not-present Fraud

A credit card may be safe in your wallet, but your assets may not be.

Card not present payment refers to transactions made when both the card owner and the credit card are absent at the time of sale. For example, when you buy stuff online or on an ecommerce store platform, when you purchase through phone call and give the customer staff your credit card information, when you set up automatic payments for electricity bill or water bill.

Card-not-present payments are extraordinarily convenient and easy to use. But the major drawback of this type of transaction is, when fraud happens, it’s likely impossible to trace. Some companies, like Securter, are working on tools to make this kind of fraud much harder to commit. For the moment, there are still risks in this area.

Card-not-present fraud (CNP fraud) occurs when your card is hacked, hackers take over your account, gain access to your credit card information and use it to make remote purchases. Unfortunately, purchases continue to be processed as the online stores can’t discover the illegal nature of the transactions or verify the customer’s identity.

In 2018, Javelin Strategy & Research conducted a survey of 5,000 U.S. citizens over age 18 to get insights into fraud trends. According to the results of Identity Fraud Research, online shopping presents the greatest risk of fraud and CNP fraud is now 81% more common compared to point of sale fraud, a popular method before.

In addition to identity fraud, card-not-present fraud can result in identity theft, meaning crooks use cardholder’s information for the act of impersonating an identity, instead of illicit financial gain. Not only do cardholders suffer from this type of fraud, but merchants are affected as well; in most cases, the loss is more enormous, accounting for billions of dollars every year.

The best practices for cardholders to minimize card-not-present threats are to be more careful when you have to provide your personal or transactional details online. It’s also recommended to research the stores before making online purchases to spot red flags from other customers and ensure the payment system of the stores is safe.

In some cases, fraudsters take over your card information for financial gain, instantly connecting your bank to temporarily suspend your account until the situation is resolved.

Stolen Card Fraud

Stolen card fraud is another unexpected case with credit cards. It happens when your card has been lost or stolen by pickpocket. In fact, a thief won’t miss a single chance to use your card until it’s suspended or reaches a credit limit.

According to a study from 2019, called U.S. PaymentsInsights – Technology and Fraud: Consumer Concern Is Real, 29% of US consumers reported a card lost, stolen, or fraudulent charges while 9% reported their physical card was stolen. While the figure of cases is not too enormous, the consequences from stolen or lost credit cards could be huge.

Clearly, keeping track of your cards is the best way to avoid losing your information. If you want to deactivate your credit card and have a new one, remember not to throw it into the trash bin. Notify your card issuer first, cancel your account and cut it up to avoid thieves taking it from the bin.

False Application Fraud

False application fraud is a type of credit card fraud happening when fraudsters use your personal information to register for a new account in a service or product. This trick is also a type of identity theft. The thing that sets false application fraud apart from card-not-present fraud (since both can lead to identity theft) is the combination of both virtual and physical factors. In one word, it could be performed in face-to-face or online scenarios.

Imagine someone has your personal information including the legal name, date of birth, address, social security number, as well as other important details. It’s now pretty simple for him or her to submit a credit card application, gathering as much debt as they can and drag your credit card score down.

In another scenario, crooks can link a credit card with a different name to your bank account and eventually you are hit hard with repayments performance. False application fraud can somehow extend financial-related scope of threat since stolen or synthetic identities are made used by organized criminal groups for higher levels of crime.

To protect yourself from data breaches, or identity theft under false application fraud, you need to make sure to create a strong password and enable an additional layer of security to all of your accounts. It’s commonly called two-factor authentication (2FA).

As mentioned above, always double check the sites you visit and be careful whenever you intend to provide your personal information to them. Additionally, keep an eye on your credit reports and transactional details so that even if fraud happens, you can quickly detect and provide instant protection.

SOURCES

https://www.javelinstrategy.com/research/2018-identity-fraud-fraud-enters-new-era-complexity

https://www.mercatoradvisorygroup.com/Reports/2019-U_S_-PaymentsInsights—Technology-and-Fraud–Consumer-Concern-Is-Real/