OREANDA-NEWS. April 29, 2015. When Apple Inc. unveiled its much-anticipated Apple Pay service last September, executives at businesses with skin in the game heaped praise on the mobile-payment system. Marianne Lake, chief financial officer at Apple Pay partner JPMorgan Chase & Co., dubbed the service "the future." Deborah Hopkins, chief innovation officer at Citigroup, another partner, said Apple Pay could take mobile payments "to a new level."

Apple and its banking partners have hit a snag on the way up, however. The incidence of fraud at Apple Pay is thought to be unusually high. The tech giant denies the claims, yet it also has suggested that credit-card issuers may be at fault by not properly vetting consumers during the Apple Pay setup process, which involves loading a customer's credit-card info into Apple's mobile-wallet iPhone app. Criminals, armed with stolen Social Security numbers, have been able to load other people's credit cards onto their own iPhones. Bank executives claim they're not at fault. A Citigroup spokesman said its authentication measures for customers looking to load cards onto Apple Pay are "implemented appropriately."

Either way, the situation at Apple Pay is more bad news from the virtual front for large banks. Financial institutions are now routinely the subject of denial-of-service attacks, including one that took down the websites of Citi, Bank of America and Wells Fargo, among others. Some intrusions have been costlier. Hackers got past JPMorgan Chase's defenses last summer and stole information on 76 million customers. Security consultancy Kaspersky Lab in February revealed it is tracking a crime ring—dubbed Carbanak—that has managed to steal \\$1 billion from 100 banks in about two years.