Apple’s notoriously fraud-prone gift cards may finally be getting a security upgrade. With the release of iOS 27 next week, Apple is expected to introduce a new way to redeem gift cards: simply tap a security chip embedded in the card against the back of a compatible iPhone. The technology could give Apple a faster way to verify that a card is legitimate, unused, and still valid.
According to MacRumors, the system will also tell users when a card has been blocked or cancelled, displaying error messages such as “This card has been blocked” or “cancelled.”
“The move by Apple represents a first step in shifting the marketplace from magnetic stripes and code plus pin redemption options,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “Adapting physical gift card stock to add NFC chips will take time, but having easy redemption options like on an iPhone gives card manufacturers, distributors and sponsoring retailers more runway to adapt their stock by adding new technology and security layers.”
Trouble with Fraud
As a well-known consumer brand that sells many high-priced products, Apple’s gift cards have long been a popular choice for holidays and other gift-giving occasions. Because the cards often carry balances of $100 or $200, they can be resold for significant amounts, making them an attractive target for fraud.
Apple has also faced criticism over how it handles fraudulent or stolen gift cards. In 2024, the company agreed to settle a lawsuit alleging that consumers not only lost the value of their gift cards to fraud, but also received little or no assistance from Apple after being scammed.
End-to-End Technology
The new technology could give Apple a more effective way to prevent fraudulent cards from being redeemed in the first place. And as both the card issuer and the company behind the hardware and software used to redeem it, Apple is in a position to connect those pieces in a way that other retailers may not be able to.
“It’s a way for Apple to be a leader in helping reduce gift card fraud, not only with their gift cards but also throughout the ecosystem,” said Hirschfield. “This is critical for Apple, as their devices are the conduit to so many retailers through apps and mobile websites.
“I see this as Apple the hardware/software company making a move, not Apple the retail company making a move,” he said.