During a recent event regarding the launch of Transport for London's contactlesscard payment system , MasterCard UK and Ireland president Marion King told us that it was an exciting time as technology changes the way we pay for things. King added that "We welcome Apple Pay." In a press release that was published the day of the Apple Event introducing the iPhone 6, Ed McLaughlin, MasterCard's chief emerging payments officer stated that "Apple has a long tradition of introducing breakthrough products with features that really matter to people. Apple Pay, combined with MasterCard's payments technology, gives consumers an easy, secure and private way to shop." MasterCard's "Priceless" marketing campaign began 17 years ago and they're extending this tradition through to the introduction of the MasterCard and Apple Pay relationship (as noted in our cover graphic). Our report lists a series of targeted points that MasterCard wants you to know about using Apple Pay and the technology behind the MasterCard payment system.





Top Things to Know about Apple Pay working with MasterCard's Digital Payments Platform

1. Apple Pay Transactions Will work Just like Any Other MasterCard Transaction: Transactions that originate from Apple Pay will work the same as any other MasterCard transaction. The consumer will see the card they wish to use in their iPhone from the issuer that they are used to doing business with, the merchant sees a MasterCard transaction – either the familiar contactless form in store or Digital Secure Remote Payment for in-app. Apple is never in the transaction path.



2. Built With the Most Secure Technology: In building a secure payment experience we've taken advantage of industry-standard EMV cryptology, in our digital enablement service and in Apple Pay, to ensure transactions are fully in line with the U.S. EMV migration and can take full advantage of the most secure payments technology in the world. We've taken this crown jewel of payment technology and put it at the heart of the program.



3. An Added an Extra Layer of Protection: In order to further protect consumers we've added an additional layer of security to the digital payment process through tokenization. This means that the number stored in the Secure Element in a consumer's iPhone6 is not the same number as on their card. In the (unlikely) event that someone is able to pick up the data off of a transaction – what they're going to get is a 16 digit token number and a cryptogram (a long number unique to each transaction.) If they try to use the token without a cryptogram we'll reject the transaction. And they can't generate a crypotgram without the EMV keys that are stored safely in the Secure Element on the iPhone. A lot of technical talk – but added together it simply means that we've put the right protections in place to keep consumers safe.

4. Authenticating with Biometrics: Until now authentication on a mobile device was always a PIN. Apple viewed Touch ID as a critical asset for payments as a cardholder authentication. Within Apple Pay consumer simply confirm a transaction with one touch. Those that prefer not to use Touch ID can revert to using a passcode.

Apple came to MasterCard with a strong vision for building a user-friendly, secure payments service that aligned with where we were focused as a company and allowed us to leverage the foundational technologies that we'd developed over the last ten years – EMV, contactless, tokenization and DSRP.

Apple knows how to deliver great user experiences but they also respected MasterCard's knowledge and expertise. We were able to bring insights on how consumers view payments and what elements were going to be important to ensure they view this as a secure experience, representing the brands that they trust.

Five Additional Things about the MasterCard Digital Enablement Service (MDES)

1. What is MDES? MDES helps transform any connected device into a commerce device to make and receive payments. The MDES platform is helping power the new iPhone 6, iPhone 6 Plus and Apple Watch to enable secure payments to take place for contactless and in-app payments.

2. How it works: All MasterCard transactions made through Apple Pay are ready to use industry-standard EMV-level security, and are protected using standards-based payment tokens. Tokens are card numbers that mobile devices use in place of the card number printed on the plastic. MDES validates the transaction, maps from the token back to the PAN and forwards it to the issuer for authorization.

3. Why do we use tokens? Using tokens enable us to deliver a more secure and a better payment experience. The extra layer of security comes from the fact that we can lock a token to a specific device or channel. If the token is somehow compromised and a fraudster tries to use it MDES will block the transaction. The better customer experience comes from the fact that in the event a device is lost or a plastic card is compromised – we can break the link in MDES between the tokens and the card – and reissue the token or the card – without disrupting the consumer. It's truly powerful when you can use advanced technology to deliver more security and remove consumer pain points.

4. What kind of transactions does MDES support? MDES supports contactless payments and Digital Secure Remote Payments (DSRP). DSRP is a transaction method where a consumer is able to make in-app purchases using a token. Contactless payments leverage NFC technology for point-of-sale transactions, while DSRP delivers EMV-like transaction for in-app payments.

5. What's next for MDES? MDES makes it easy for our issuing partners to enable their MasterCard accounts on devices that consumers want to use to pay on the go. While MDES launched in the U.S. in 2014, it will expand more broadly to other major markets during the course of 2015, and will be extended to support MasterCard Cloud Based Payments which we announced earlier this year.

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