Apple is working with Nordstrom to create an Online Payment Network
No, you didn’t misread that post. Apple is working with Nordstrom to create an online payment network that all sources believe to be token based. It’s going to be an interface similar to paypal and it will function the same way for Apple users. This is another step Apple is taking to bring their users closer together and offer greater advantages to their users that Android users wouldn’t have. The service will work well with all of the upcoming accounting and wallet features that will be unique to Apple users (not unlike Google Wallet).
Tokenization instead of Interchange Processing?
As opposed to credit card processing in the normal way that you think of it, where card #s get routed to the bank along with a unique transaction ID, think about the way that you connect to your home Wifi network. The Wifi network sends a signal out from the router that is encrypted and in order to take advantage of that signal, you have to use the same encryption to transmit and receive signals through it. In the same way, tokenization uses a method of sending complex words and character strings between a middle man bank service and the actual phones or point-of-sale equipment. It’s infinitely more secure by comparison due to the unlimited possibilities for complexity. It was recently discovered that Apple already has existing patents in the token/transaction areas.
Financial institutions — card issuers and networks — prefer token technology because it replaces primary account numbers, those 16-digit card numbers on the front of credit and debit cards. Instead, the tokenization technology uses complex codes that are easily transmittable over the air and between devices, but that are used only once, so even if they are intercepted, are of no use to fraudsters.
With the Apple Keynote discussion coming tomorrow, we may find out more about this shortly. Like always, your source for cell phone repair in Schaumburg will bring your up to the minute news on the whole event tomorrow. Check out this picture demonstrating what the new Apple transaction hub might look like:
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