In addition to near field communication (NFC) as part of its mobile payments drive, Apple will be incorporating something called “tokenisation” technology, according to sources who spoke with Bank Innovation.
As the report explains, “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.”
Apple has been investigating tokenization technology for several years, with multiple patents relating to the process dating back as far as 2009.
