White House announces federal cards for veterans, Social Security will support Apple Pay

The White House on Friday revealed that users of federal payment cards, including Social Security and veterans benefit debit cards, will become compatible with Apple Pay.

The announcement was made in connection with President Barack Obama's cybersecurity summit in Silicon Valley, where Apple CEO Tim Cook is set to speak on Friday. The deal, which was revealed to Bloomberg, applies to the government's Direct Express payment network and cards issued through GSA SmartPay.

The support from federal payment cards may be viewed as something of an endorsement of Apple Pay by the U.S. government. The cards are responsible for $26.4 billion worth of transactions every year.

Apple Pay was developed in collaboration with existing credit card companies and banks, meaning that support for the service and its secure tokenization method must come from third party card providers.

Apple has touted the security of its new Apple Pay service, particularly the fact that credit card numbers are never exchanged when authorizing transactions with merchants. Instead, a different number for making payments is generated, in place of a merchant receiving a credit card number, CVV, and expiration date.

Even Cook himself has said he has been surprised with the rapid adoption Apple Pay has seen since its debut last October. The tap-to-pay e-wallet component of Apple Pay is exclusive to the iPhone 6 and iPhone 6 Plus, though it will also be integrated with the upcoming Apple Watch.

Last month, Cook declared that 2015 will be "the year of Apple Pay." There are about 750 banks and financial institutions participating.

Apple Pay already accounts for 80 percent of contactless transactions at Panera Bread, while upscale grocer Whole Foods saw a 400 percent increase in NFC-based payments since the service launched.