Apple CEO: Apple Pay To Support Federal Transactions

Apple Pay is getting the U.S. government's seal of approval, according to Apple CEO Tim Cook, who Friday said the mobile payment service will be accepted at many government facilities.

Speaking to executives and students attending the White House Summit on Cybersecurity and Consumer Protection, Cook said Apple’s aim is to make the wallet become ’a remnant of the past’ by enabling consumers to carry their credit card information, their passport, driver's licenses and other documents in digital form without having to sacrifice security.

"We shouldn't have to trade security for the convenience of having all of this at our fingertips," Cook said in his address at Stanford University on Friday, reaffirming his company commitment to security and privacy. "Our customers' trust means everything to us, and we've spent decades earning that trust."

[Related: Tim Cook: Everyone Wants An iPhone, And Other Revelations About Apple's Future]

Support for the Apple Pay service at the federal level will enable consumers to use the service at federal facilities and national parks where payments are made. The company also plans to support federal procurement cards issued to government employees and special debit cards used by those receiving Social Security benefits and veteran pensions, Cook said.

Partners applauded the move as a step forward for Apple Pay.

"I view this as positive ... Apple already has a large play in the government so this makes total sense," said Stephen Monteros, vice president of business development and strategic initiatives at SIGMAnet, an Ontario, Calif.-based Apple partner specializing in the education market. "iOS is very pervasive in government devices so it makes sense to enable Apple Pay for government functions. And from the government's side, people are already familiar with the Apple platform, which will make adoption much faster."

The day-long cybersecurity summit aims to hightlight the Obama Administration’s efforts to bolster cybersecurity across the public and private sectors. President Obama, who made an appearance at the event, is promoting legislation that calls for federal data breach notification rules and liability protection to enable private sector firms to share information with the government without exposing sensitive customer information.

Cook is touting the Apple Pay service as the answer to the rising tide of high-profile credit and debit card breaches in recent years and a way to protect against identity theft.

"The personal impact of these security breaches can be devastating," Cook said. "Too many people have had their identities stolen, finances threatened and lives turned upside down."

Apple unveiled its Apple Pay service in September, making it generally available with its new iPhone 6 smartphones a month later. The service is being initially supported at about 220,000 locations that are equipped to accept NFC mobile payments, including McDonald's, Walgreens and Target. It is also being supported by the major credit card brands and issuing banks.

The mobile payment system eliminates the plastic card and magnetic stripe, replacing the information with a unique one-time code that is only good for one transaction from the iPhone, Cook said. Apple is also committed to keeping the details of the transactions between the consumer, the merchant and the issuing bank private, he said.

President Obama issued an executive order in October forcing federal agencies to purchase new payment terminals that support stronger security features, including the technology that enables Apple’s payment service. The modern payment terminals support chip cards designed to reduce fraud at payments made at brick and mortar stores.

"The credit card information and purchases are personal to you, and they should stay that way," Cook said.

Next: 2015 Will Be 'Year Of Apple Pay'

Apple Pay has seen a successful few months since its release, with some 750 banks and credit unions signing on to the mobile payment system to bring it to their customers. On Tuesday, the Cupertino, Calif.-based company announced a partnership between Apple Pay and JetBlue, so that clients could use the payment system for in-flight services.

During Apple's recent first-quarter earnings call, Cook stated that Apple Pay makes up more than $2 out of $3 spent on purchases using contactless payment across the three major U.S. card networks, and dubbed 2015 "the year of Apple Pay."

Apple does not store the credit card data on the device or in its servers and the company’s security processes are strong, he said explaining that Apple’s networks and systems are segmented. Apple hardware and software use encryption, and a security operations team monitors the infrastructure around the clock.

As the payment system continues forward, Apple, Visa, MasterCard, Comerica Bank and U.S. Bank are committed to working together to make Apple Pay available for users of federal payment cards such as DirectExpress and GSA SmartPay cards.

PUBLISHED FEB. 13, 2015