Apple Pay sees 60x more fraud than regular cards, expert says

Apple’s mobile payment service sees roughly 60 times as much fraud as traditional credit card transactions, a mobile payments expert estimated.

Cherian Abraham, a Richmond-based payments consultant for banks and retailers, wrote that Apple Pay fraud has “graduated from an itch to a raging infection” due to security flaws in the mechanism for adding a payment card.


Fraud in the so-called Yellow Path is “growing like a weed, and the bank is unable to tell friend from foe,” Abraham wrote in a blog post on Feb. 22. “No one is bold enough to call the emperor naked.”

He estimated that it’s not unusual to see fraud account for about 6 percent of Apple Pay transactions compared with 0.1 percent using a traditional credit or debit card, according to the Wall Street Journal.

The comments raise questions about a service that has been called a success for Apple and touted for its security.

Apple Pay has rapidly gained traction since its launch in October. Apple officials announced in January that the service was responsible for two-thirds of all dollars spent using some form of mobile payment system with Visa, MasterCard and American Express in its first three months.

The White House recently announced that Apple Pay would be available as an alternative to federal payment cards in systems like GSA SmartPay. The service will also be available for transactions with national parks.

Apple has said the service is designed to be “extremely secure” and suggested the banks may be at fault for the verification of fraudulent cards.

—This post was corrected at 5:41 p.m. A previous version incorrectly stated the rate of Apple Pay fraud estimated by Abraham.