December 2014 Using Your Smart Phone As a Credit Card Substitute
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Newsletter of the Potomac Area Technology and Computer Society December 2014 www.patacs.org Page 1 Using Your Smart Phone as a Credit Card Substitute by Ira Wilsker WEBSITES: https://www.paypal.com/us/webapps/mpp/pay-in- http://currentc.com stores http://www.pcworld.com/article/2607312/how- https://www.paypal.com/us/webapps/mpp/store- apple-pay-could-make-the-target-and-home- locator depot-breaches-a-thing-of-the-past.html http://www.pcworld.com/article/2846535/a-guide- https://www.gosoftcard.com to-the-top-mobile-payments-options.html https://wallet.google.com http://www.apple.com/apple-pay/ https://www.google.com/wallet/shop-in-stores/ www.mercurynews.com/business/ci_26938386/ http://www.mastercard.us/cardholder-services/ mobile-payments-apple-pay-google-wallet-and- paypass-locator.html otherhttp://currentc.com http://www.pcworld.com/article/2607312/how- (continued on page 2) Using Your Smart Phone as a Credit Card Substitute ………...…....1 Fairfax October Meeting ……………………………………………6 Linux Sites Recommended By Geof Goodrum………………..........8 With All of the Media Reports About Massive Data Breaches, What Can We Do?..............................................................................9 Valuable Information From the PATACS Site ………………….....12 Vendors Recommended By Members…..…………………………..13 PATACS Annual Financial Report, Fiscal Year 2014 ……………...l4 PATACS Information ……………………………………………..,.15 December 2014 PATACS Posts Page 2 the number of Euro- pean credit and debit cards that were hi- jacked was much smaller. For the past several years, the ma- jority of European (and many Asian) issued cards have had a more secure embed- ded microchip that contained the cus- tomer information, It should be news to no one that over the rather than the magnetic stripe widely used past year there have been massive data breaches at here. As overseas POS terminals (and many thousands of retail locations. In my case, over the ATMs) were modified or replaced in order to past year, my bankcard issuers have initiated the take advantage of the more secure microchip replacement of four credit cards and a debit card technology, most domestic POS users have often (one major credit card was replaced twice). Since I been reluctant to implement the enhanced secu- carefully review my monthly credit card statements rity technologies citing the massive capital in- for questionable activity, I am fairly confident that vestment in the current generation of magnetic although several of my accounts were compro- stripe POS readers. Looking at my recently re- mised by the massive retail data breaches, there placed credit cards, all have the embedded chip, have been no illicit transactions posted to any of as well as a magnetic stripe. my accounts. These data breaches and the related vul- Following last year's massive Target data nerabilities have obviously caught the attention theft, the media played up the fact that most credit of our domestic technology industry, as in recent and debit cards in the United States are still using months there has been a flurry of technological the obsolescent magnetic stripe technology in order advancements that may offer most of us the op- to process "POS" (Point of Sale) transactions. It is portunity to mitigate the risks of a somewhat the vulnerability of this magnetic stripe data, and insecure plastic credit or debit card. While the methods used to process the digital transac- much of the media fanfare has gone to the intro- tions, have made such transactions vulnerable to duction of Apple's Apple Pay electronic pay- cyber attack. As the American credit and debit ments system (apple.com/apple-pay), others cards were purloined by the hundreds of millions, have been active in promoting their respective systems including eBay's PayPal, xx , xxxxxx (continued on page 3) www.patacs.org December 2014 PATACS Posts Page 3 Google’s Wallet, CurrentC (a joint effort of Sears, cording to Apple, "One touch to pay with Target, and WalMart, CVS, and others), GoSoft- Touch ID. Now paying in stores happens in Card (joint effort of American Express, Chase, one natural motion - there’s no need to open an and Wells Fargo), and several others. While there app or even wake your display thanks to the are some variations in the technologies utilized by innovative Near Field Communication antenna each, they are all designed to allow the use with a in iPhone 6. To pay, just hold your iPhone near smart phone or related device to make secure re- the contactless reader with your finger on tail transactions without the use of a traditional Touch ID. You don’t even have to look at the plastic credit or debit card. screen to know your payment information was With its outstanding ability to promote successfully sent. A subtle vibration and beep itself, Apple has had much of the media spotlight let you know." Other Apple devices, without with its recently announced Apple Pay sys- the NFC capability can use the Apple Pay app along with an integral finger print reader (part tem. According to Apple, "Paying in stores or of the Apple Pay app) to complete a financial within apps has never been easier. Gone are the transaction without presenting a plastic credit days of searching for your wallet. The wasted mo- card. Apple Pay requires that one or more es- ments finding the right card. Now payments hap- tablished credit card accounts be linked to Ap- pen with a single touch. Apple Pay will change ple Pay, with the user having the option to se- how you pay with breakthrough contactless pay- lect which credit card will be used to process ment technology and unique security features the Apple Pay transaction. By default, the credit card linked to the user's iTunes account built right into the devices you have with you eve- is the primary credit source, but other cards ry day. So you can use your iPhone, Apple can be securely added to the account. Watch, or iPad to pay in a simple, secure, and pri- PayPal, one of the world's most widely used vate way." What garnered the most attention is a digital payment systems, recently introduced feature of the iPhone 6 devices (also present on its own smart phone app that can be used for in many other recent smart phones) called "NFC" or -store POS transactions (paypal.com/us/ "Near Field Communications". This is a very webapps/mpp/pay-in-stores), without the use of a plastic credit card. According to PayPal, short range radio technology that allows digital "Forget your wallet. Use our app like a wallet devices to communicate with each other when to pay at the counter, from the table, or from held physically close to each other. Again, ac- around the corner, your order is in your hands. (continued on page 4) www.patacs.org December 2014 PATACS Posts Page 4 smart phones, as CurrentC does not incorporate store gift cards, and selected credit and debit card NFC. Instead of using NFC, which is not availa- (Pay). ble on most of the existing smart phones, Cur- I predict that as these new technologies become rentC displays a unique bar code or QR type of more widely implemented, we will see the num- image on the phone screen that is scanned by the ber of mass data thefts decline, saving the finan- cashier; every transaction will have a unique im- cial institutions (and their millions of account age displayed. CurrentC is designed to connect holders) from substantial losses. We will also see directly to the consumer's bank account, bypass- these payment systems evolve and improve as ing the credit card fees imposed by the bank cards they become more widely accepted, along with on the retailers. Like many of the existing indi- the inevitable failure of some. We may see con- vidual store cards and loyalty cards, CurrentC can solidations (mergers) among some of these sys- take advantage of the personal information en- tems, and some may simply cease to exist as they tered by the user when the account is creat- find that they cannot successfully compete in the ed. Since CurrentC will have some personal in- market place. formation, incentives, rewards, coupons and other Whatever happens with these new pay- promotions may be offered the user. CurrentC ment systems, it appears likely that our traditional will implement a "Save, Earn Pay" service where plastic credit cards may become as obsolescent as users will automatically receive offers, coupons, paper checks have become, and these new tech- and other incentives from the participating retail- nologies will reign supreme ... until some newer ers (Save); get instant points and rewards from technologies make these obsolete. In terms of participating loyalty programs (Earn); and com- POS payment technology, this will be an interest- bine and coordinate between checking accounts, ing couple of years. www.patacs.org December 2014 PATACS Posts Page 5 Or simply select PayPal at the register to log in American Express offering a $1 cash back bo- and pay, just like online." Experimenting with nus, in addition to any other rewards, for each the PayPal Store Locator (paypal.com/us/ SoftCard transaction utilizing American Express. webapps/mpp/store-locator), using the Examin- Google wants very badly to compete in er's zip code (77701), there were about 75 nearby this lucrative field, and had developed an ad- businesses that accept payments with the PayPal vanced digital "Wallet" (wallet.google.com) that app including Home Depot, Dollar General, Of- can utilize a secure app that can be used for a ficeDepot, American Eagle, Aeropostale, variety of transactions. For users with NFC ToysRUs, Academy Sports, and a variety of med- compatible phones, that feature can be used at ical offices, florists, clothing stores and bou- many retail locations; for those without a com- tiques, restaurants, retailers and service business- patible phone, Google Wallet offers a secure es.