Credit Card Fraud Case Illustrates Limits of Apple Pay

Japanese authorities are investigating what appears to be the country’s first case of fraud using Apple Pay, reports The Japan Times.

The incident occurred in March, when four Chinese nationals loaded stolen credit card details onto two iPhones to buy 981 cartons of cigarettes. Remarkably, this was done at a convenience store, and despite the fact that the alleged perpetrators scanned their devices 704 times over a 10-hour period, the store manager claims he thought they were simply tourists (and presumably very heavy smokers) on a shopping spree.

The heart of the issue has nothing to do with Apple Pay, of course: It’s that the credit cards were stolen, with the issuers contacting police after noticing the transaction activity. But the incident does help to illustrate the limits of Touch ID, the fingerprint recognition system used to verify Apply Pay transactions: While it does help to ensure that the person using a given iPhone is its owner, it can’t necessarily verify that the credit cards they have loaded belong to them.

It also suggests the need for greater vigilance on the part of shop owners when they get sudden wholesale purchases of cigarette cartons.

Source: The Japan Times